Savers lose 11p off every £1 due to inflation

In the United Kingdom, as of July 23, 2025, inflation has severely impacted the value of savings. Financial data firm Moneyfacts has calculated that savers have lost approximately 11 percent of their savings' value since 2020, prompting calls for the Bank of England to take action. Inflation reached a peak of 11.1 percent in October 2022, while average savings rates have been significantly lower, at only 1.48 percent on average in 2022. Such a disparity has led to calls for the Bank's base rate to be maintained at two percentage points above the rate of inflation to safeguard savers' funds. Adam French from Moneyfacts emphasized that the Bank must establish sustainable rates to protect savers and ensure adequate deposits for mortgage and credit lending. However, these recommendations have faced opposition from some economists, who argue that the Bank’s primary role is to manage inflation, even if that means imposing higher interest rates for extended periods. Furthermore, Simon Youel from Positive Money criticized the high street banks, indicating that they have been slow to pass on the benefits of rising base rates to consumers, ultimately disadvantaging savers by not providing higher returns on deposits. This has raised concerns about the profitability practices of banks and the impact on consumer savings, emphasizing the need for holistic solutions to support savers.