Inflation has cost UK savers almost £2,500 over the last ten years, according to new research.
As times become tougher, making money go further is a priority for many consumers. Research by Yorkshire Building Society found that 96% of consumers are looking for ways to stretch their finances.
Despite the typical cutbacks that the majority of Brits are making when it comes to saving money, many are not factoring in the rate of inflation.
Inflation has risen to 4.5% recently and the Bank of England predicts that it could increase to 5% before the end of the year.
With the base rate remaining at an all time historic low of 0.5%, savers are suffering greatly at the hands of low interest rates and, in effect, are losing money.
The impact of inflation is not just affecting savings, with over 90% of people questioned suggesting that everyday spending has increased as a result of higher inflation.
Consumers are tightening the purse strings and making savings wherever possible through vouchers and discounts.
The research found that 62% of Brits are buying more supermarket offers. With the UKís leading supermarkets currently engaged in a price war to win over consumers, it proves how little the public has to spend on essential items such as food.
The research also found that 55% of people are eating out less and a further 45% of people are choosing to shop at cheaper supermarkets. With the cost of motoring increasing, 34% of people are using their cars less.
However, many people are unaware of the real value of their savings.
The average savings account is at £11,648 and over the course of ten years in a basic easy savings account the interest earned would have been £1,624, bringing the savings to £13,272. However, had that been invested in an inflation linked savings account the total amount would be £15,700.
Simon Broadley from Yorkshire Building Society said, “Most people realise that inflation has a significant impact on their day to day spending and are budgeting accordingly. However, most people seem to forget that, while it is an excellent idea to save, it is important to ensure that you.î
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