UK savers ordered to check one thing now as inflation becomes ‘quiet destroyer of money | Personal Finance | Finance

Britain’s army of “careful savers” have been urged to check their accounts with immediate effect due to rising inflation being “the quiet destroyer of money.”

Financial experts have warned Express’ readers to take action after inflation rose by 3.6% in the 12 months to June and went up by 0.2% from May, according to official figures. The numbers delivers a fresh blow to households already struggling with rocketing costs and heaps more pressure on Rachel Reeves. The Chancellor has pledged to grow the economy while keeping inflation in check; however, the latest figures could have an impact on her delicate balancing act.

But while the inflation increase is a body-blow to hard-pressed families struggling to stay within budgets following years of high inflation after the cost-of-living crisis that exploded under Liz Truss’s disastrous short-lived Conservative administration, those with money in savings accounts could now see the value of their money plummet too.

Rob Mansfield, independent financial advisor at Tonbridge-based Rootes Wealth Management, said: “Inflation is the quiet destroyer of money. And it’s rising, which is dire news for savers. Inflation reduces what your money is worth and so it’s more important than ever to check the interest rate on your savings accounts.

“Is your bank paying you an interest rate above inflation? If not, it won’t feel like it, but in real terms the value of your money is going down each year as it will buy less than it did a year ago.”

Meanwhile, Colin Low, managing director at Ipswich-based wealth manager, Kingsfleet, urged savers to check their accounts as a matter of priority: “Savers: do not delay. With inflation rising, now is the time to check the interest you are receiving on your savings. If you can tie up your money for a year, you may still get a fixed rate of around 4%. However, if inflation continues to rise and that’s a possibility given world events and domestic economic policies, you may still lose out in terms of the real value of your savings. Scan the market for the best deals, be savvy and, if you need to, seek advice.”

Scott Gallacher, director at Leicester-based wealth manager, Rowley Turton, also expressed concern.

He said: “The rise in inflation to 3.6% is bad news for savers because it erodes the real value of their money. Even if you’re getting a decent interest rate on your savings, higher inflation means your cash is losing purchasing power faster than before. It’s a reminder that savers can’t afford to be complacent and need to check that their money is working as hard as possible.

“However, there’s a potential silver lining. This uptick in inflation could make the Bank of England more cautious about cutting interest rates in August. For savers, that means higher rates might stick around for a bit longer, giving them more time to lock into competitive fixed-rate accounts or higher-paying easy access deals. Now is the time to ensure that your savings are earning a decent rate of interest rather than languishing in low-paying accounts. Shop around and look at fixed-term accounts for higher rates if you don’t need immediate access.”