Inflation 'erodes savings accounts'

%VIRTUAL-SkimlinksPromo%Only around one in five savings accounts on the market pays enough interest to beat inflation, despite the better news for households that the squeeze on their finances is easing.

Financial information website Moneyfacts said the fall in CPI inflation to 1.6% means that out of the 816 savings accounts on the market, 159 of them, or 19.5% of the total number, offer returns that will offset the impact of both inflation and tax. Of these inflation-beating accounts, 71 are fixed bonds and 88 are tax-free Isas.