National Savings and Investments (NS&I) has warned that consumers should pay attention to their savings accounts to ensure they are getting a good deal.

Spokesperson Gill Stephens said that people should be aware that unless they are earning at least four per cent in interest after tax, inflation is causing their money to be worth less.

And although the factor is often discussed in relation to the rising cost of things like food, it is often ignored when it comes to managing savings.

"People need to realise that inflation also affects their savings. They need to make sure that the return they are getting on their money is keeping up with the rate of inflation," she added.

Ms Stephens was commenting following a survey by NS&I, which found that over a third of people are confused by the use of terms such as 'tax' and 'inflation' in relation to savings.

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