UK savers collectively have lost £36.45 billion ($59.4 billion) in savings over the past year due to runaway inflation, according to The Telegraph.
A review by accountants at UHY Hacker Young showed that the average return of 1.6% on savings and existing accounts has lagged far behind soaring living costs in Britain, which jumped 5.2% in April on a year-over-year basis.
By failing to grow at the rate of inflation, British savers — who as a group have £1.003 trillion held in savings, around £110 billion ($179 billion) of which is kept in balances that don’t pay any interest at all — have seen the value of their money erode consistently. Britain’s inflation rate has been 4% or more every month this fiscal year (that figure is considerably higher than the Bank of England’s target of 2 percent).[From The Telegraph]: “Mark Giddens, partner at UHY Hacker Young, said: “The amount of money eroded away through inflation is staggering. In this climate of high inflation, savers need to be more proactive and shop around to get the best rates.
In the U.S., the average rate on savings accounts is 0.21%, according to MonitorBankRates.com. The rate of inflation, according to the latest CPI data, is 3.2%. Should that gap widen further, and returns on other fixed investments like bonds remain depressed, more and more Americans, particularly those living on a fixed income, will begin to experience a scenario similar to that in the UK right now.”