High CPI inflation 'threatening consumer savings'

High levels of inflation are continuing to heighten the need for consumers to seek the best savings interest rates.

Latest figures indicate that Consumer Price Index CPI has fallen to three per cent this month, although this is still far above the government's target measure of two per cent.

With the Bank of England continuing to freeze its base rate at a historic low of 0.5 per cent, savers should be using online comparison tools to find competitive interest rates.

Unless they are able to place their cash in accounts paying above the rate of inflation, their savings will be eroded away by higher consumer prices.

For higher-rate taxpayers, the need to access the best interest rates on savings is even more pressing - even if this means tying capital up for an extended period.

Earlier this week, Santander reported that the average saver is putting away 34 per cent more than last year.

Reza Attar-Zadeh, director of savings and investments at the bank, said setting aside even a small amount each month "can make a huge difference in the long term".

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2010-03-25 13:38:01 © Moneyextra.com