UK savers lost £1,000 to record inflation, low savings rates

low savings rates

Inflation rates are expected to rise again by the end of the year to 11%, despite currently being at its highest rate since 1981

The average UK saver has lost more than £1,000 over the past five years due to a combination of soaring inflation and low interest rates on saving accounts, according to personal finance comparison site

With the average UK saver having about £7,500 put aside and easy-access savings rates losing 13.5% of their value to inflation since 2017, this means savers’ money will be worth over £1,000 less in real terms than five years ago.

Inflation rates are expected to rise again by the end of the year to 11%, despite currently being at its highest rate since 1981. If this happens and savings interest rates stayed the same, it would mean savings accounts would effectively lose 10.5%, or £789, in value each year.

Michelle Stevens, banking expert at, said: The fact that savings accounts are currently losing people a lot of money in real terms is yet another worrying outcome from the cost of living crisis.

They are still a prudent choice for many consumers given the security they offer and the fact that they do still earn you interest, however it may not be a sustainable option for many if inflation doesn’t start to come down soon, she said.

Stevens said: However, a bear market – that many predict will get worse – isn’t inspiring confidence in choices like investing or cryptocurrency either. The potential to get inflation-beating returns also comes with the possibility of losing some or all of your money.

One option to protect your money, for those under 40, is to get an ISA. A lifetime ISA offers a guaranteed 25% return (up to £1,000 per year), but it must only be used to buy a first property or taken out after reaching 60 or you will forfeit the interest on the account, she said.

Stevens added: Also, putting more into your pension pot could be another option as you get employer contributions and tax relief from the government.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Getting Money Wise. The information provided on Getting Money Wise is intended for informational purposes only. Getting Money Wise is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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