The 25 inflation-beating savings accounts

Published by Rebecca Rutt on 17 February 2011.
Last updated on 14 April 2011

Pound coins close-up

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%
Halifax
  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

  4.20%
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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