BGN Entrepreneur

Two weeks have past ever since the Bank of England cut the base rate to a record low of 1.5%, leaving lots of savers struggling to earn a return on their cash.
The average rate on an instant easy access account stands at 1.46% on a balance of £1000. Nearly 50 savings accounts on the market pays just 0.1% interest. In spite of some new accounts launching this week, the outlook remains bleak.
Although the consumer price inflation sharply dropped to 3.1%, there are very few savings accounts now offering a real return to taxpayers even at this lower rate. The accounts paying the lowest amounts of interest include the Halifax variable rate Isa, which pays 0.61% interest, as well as Nationwide’s Cashbuilder account paying only 0.1% interest.
Money saved in a Isa is not subject to tax, so interest of more than 3.1% outstrips inflation. However, outside a tax-free savings account one has to earn more to get a real return. A higher-rate taxpayer requires a gross return of 5.17% now to prevent the value of their savings from dropping, while a basic rate taxpayer requires 3.88%.

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