The 25 inflation-beating savings accounts

Rising inflation rates means there are now only 25 savings accounts beating the increased levels of inflation with only one non fixed-rate ISA, down from 118 seven months ago.

These 25 accounts only beat inflation if you're a basic-rate taxpayer. For higher-rate taxpayers, there is not a single inflation-beating savings account left on the market.

After today's inflation hikes, a basic-rate taxpayer now needs to find a savings account paying 5%, while a higher-rate taxpayer needs to find an account paying at least 6.67% according to data provider Moneyfacts.

To highlight how savings rates have struggled to keep up with inflation; savers who invested £10,000 five years ago allowing for average interest, inflation and tax at 20% would have the spending power of just £9,587 today.

Almost all the inflation-beating accounts on offer are long-term fixed-rate ISAs. Top of the list is the recently launched BM Savings 5% five-year fixed-rate ISA.

Skipton Building Society offers both a five-year and a four-year fixed-rate ISA, both at 4.5%. Northern Rock also has a fixed-rate ISA at 4.5%.

The Santander Super Flexible variable cash ISA, at 4%, is the only non fixed-rate account beating inflation.

Read our round-ups of the current best savings rates and cash ISA rates

Sylvia Waycot, spokesperson for Moneyfacts, says while a fall in inflation is welcome, it won't change the fortunes of the nation's savers who are still battling against shrinking spending power and a lack of inflation-beating accounts.

"Cash ISAs limit the amount of investment and therefore return, which is yet a further hindrance when trying to make ends meet," Waycot adds.

See the table below for a list of the top inflation-beating savings accounts

Provider   Account name   Rate
Birmingham Midshires
  Five year fixed-rate ISA   5.00%

Skipton BS

  Five year fixed-rate cash ISA   4.50%
Skipton BS
  Online five year fixed-rate cash ISA   4.50%
Northern Rock
  Five year fixed-rate cash ISA Issue 161   4.50%
Saffron BS
  Four year fixed term fixed-rate cash ISA   4.50%
  Four year fixed-rate ISA Saver   4.40%
Newcastle BS   Five year Newcastle premier ISA   4.40%
Principality BS   Five year fixed-rate ISA Issue 82   4.40%
Cheshire BS   Four year fixed-rate cash ISA (02)   4.40%
Derbyshire BS   Four year fixed-rate ISA Issue 37   4.40%
Dunfermline BS   Four year fixed-rate cash ISA Issue 29   4.40%
Bank of Scotland   Four year Halifax fixed-rate ISA saver   4.40%
Nationwide BS   Four year fixed-rate ISA   4.40%
Leeds BS   Five year fixed-rate ISA Issue 26   4.35%
West Brom BS   Four year fixed-rate ISA   4.31%
West Brom BS   WebSave four year fixed ISA   4.31%
Yorkshire Bank   Five year cash ISA fixed-rate bond Issue 9   4.25%
Clydesdale Bank   Five year cash ISA fixed-rate bond Issue 9   4.25%
Principality BS   Three year fixed-rate ISA Issue 81   4.22%
Nationwide BS  

Three year loyalty fixed-rate ISA

Leeds BS   Three year fixed-rate ISA Issue 25   4.20%
Bank of Cyprus UK   Three year cash ISA bond 29th Issue   4.15%
Santander   Variable Cash ISA   4.00%
KRBS   Three year flexible fixed-rate ISA   4.00%
SAGA   Three year fixed-rate ISA   4.00%

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Your Comments

The First Direct regular saver account for customers gives an 8% before tax interest rate (so around 6+% after tax. Beats RPI by 1%

Interest rate is not the same as interest you receive for regular savings account.  Probably why it was not included.

what is the matter with dividend paying stocks, at 5.4%

Many websites list the banks and building societies that pay the highest rates. A rule of thumb that I have always used is that the rate a financial institution pays to raise money is a straight-line indicator of their difficulties in raising money and therefore of potential financial problems that may be facing the fund-raiser. Not one website lists the credit rating of the institutions that they "promote", i.e. mention in their websites, and this omission does, I believe, a major disservice to savers. If websites had listed the credit ratings of all banks mentioned in their articles, perhaps the financial chaos of recent times may have been partly constrained.

That is irrelevant as long as they are covered by the UK compensation scheme (up to £85000 now per bank)

I don´t buy ISA´s, as they are invented by the banks for their own profiteering, and unfortunately, backed by the Government.

ISA´s generally invest in the stockmarket, where the banks, will invest in their own stocks, and reap the dividends thereof. The customer doesn´t benefit from this.

Then when all hell breaks due to earthquakes, wars etc., anybody with sense, buys, silver, gold or palladium. No ISA, invests in these, so chances are you are going to lose out.

As regards this so called UK compensation scheme on PER BANK, it DOESN'T apply to ALL banks, for if you have an account, e.g. with NAT WEST, and also with RBS, you are snookered, as one is a subsidiary of the other, and the compensation plan only applies to ONE account with one OR the other. So if you have, e.g. A savings account and a current account with both, you will only get compensated for one account with one of the banks. So be warned.

Anyone with less than 100k to invest who doesn't buy Gold or silver is a fool,but that is the one investment they don't want you look at.

I think that the Coventry Building Soc has a five year cash ISA paying 5% but you have ti invest the maximum yearly allowance

You can hold gold indirectly in an ISA by buying ETFS's - this way you avoid investing in companies you don't like but don't pay tax on your gains.

ISA's are a tool for the investor to use and they are not a sinister means of making you lose money