Experienced Independent financial advisors at Enable know how worrying inflation is to so many savers. Just at the moment some savers are throwing money at inflation-linked bonds in a bid to protect their money but they could miss out on thousands of pounds over the next five years, analysts are warning.
Banks, building societies, and even the likes of Tesco are targeting Britons with tempting savings and investments that play on fears over escalating food and fuel prices, and its true soaring inflation hit its highest level in 20 years in September: 5.6 per cent on the official Retail Prices Index (RPI).. But a saver with £50,000 to deposit could end up more than £2,500 out of pocket if inflation drops.
Some current savings deals and retail corporate bonds promise to pay as much as 1 percentage point above RPI each year, providing at first glance a 6 per cent-plus return that protects the value of savers' cash. But it might be wise to think carefully about the official figures before tying your cash up.
The latest official count in October showed RPI inflation had dropped back to 5.4 per cent. All of the leading economic forecasters say it will continue to slacken during the coming half-decade.
The average of 21 independent predictions collected by the Treasury from major institutions like Citigroup and the ITEM Club suggest inflation will fall to 3.5 per cent next year, 2.9 per cent in 2013, before rising back to 3.3 per cent in 2014 and 3.4 per cent in 2015.
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