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Rising inflation hits savers
Savers now have a choice of just eight savings accounts that offer a real return on their money, following a rise in the rate of inflation in July.
Inflation figures released on Tuesday show that the Consumer Prices Index (CPI) - the index used by the government to measure inflation - rose from 4.2 per cent in June to 4.4 per cent in July.
This follows an unexpected fall in CPI from 4.5 per cent to 4.2 per cent in June.
The rise means that a basic rate taxpayer now needs to find a savings account paying 5.50 per cent per annum to beat inflation, while a higher rate taxpayer needs to earn at least 7.33 per cent on their cash each year.
However, there are only eight accounts that beat the effects of tax and inflation for basic rate taxpayers. All of these accounts are fixed-rate tax-free Individual Savings Accounts (Isa), with the majority from building societies or small banks.
Article taken from the F.T to see more on this article - http://www.ft.com/cms/s/2/6a910f58-c7ed-11e0-9501-00144feabdc0.html#ixzz1VHjiv1ty
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