Millions with savings accounts risk losing £300 this year, expert warns
UK inflation jumped to its highest level for 10 months in January, according to new official figures.
Plane fares, rising food costs and a sharp jump in private school fees all helped push inflation higher.
The rate of Consumer Prices Index (CPI) inflation rose to 3% in January from 2.5% in December, the Office for National Statistics (ONS) said.
Following the increase, new research from NerdWallet UK has found that as many as 42 million adults could be set to lose £300 this year.
Adam French, consumer finance expert at NerdWallet UK, said: '. Following today's inflation announcement consumers must act quickly to move their money to the most competitive accounts to avoid inflation eroding their hard-earned wealth.
'There are several easy-access savings accounts available paying between 4% and 5% interest, such as Chip at 4.58% and Plum at 5.05%, plus the best regular savings accounts, into which you can save smaller amounts each month, are paying between 6% and 8%.
'Notably, First Direct is offering a fixed 7% rate for 12 months. Some of the best current accounts may also pay cashback on your spending or allow you to earn interest on your money.
'Taking 15 minutes to find a better bank account could leave you £100s better off.
'Our research found that the average UK adult is aiming to save around £10,000 this year which, following today's inflation figures, could be worth around £300 less by this time next year - in real terms.
Grant Fitzner added: (Quote 2 of 2) 💬 pic.twitter.com/5XekrK0TcL
— Office for National Statistics (ONS) (@ONS) February 19, 2025
'Instead, sticking those funds in one of the best savings accounts, which are currently paying almost 5% interest, could put £200 or more back in your pocket."
On the rise in inflation figures, ONS chief economist Grant Fitzner said: 'Inflation increased sharply this month to its highest annual rate since March last year.
'The rise was driven by air fares not falling as much as we usually see at this time of year, partly impacted by the timing of flights over Christmas and New Year. This was the weakest January dip since 2020.
'After falling this time last year, the cost of food and non-alcoholic drinks increased, particularly meat, bread and cereals.'
Rachel Reeves said her 'number one mission' was getting 'more pounds in pockets' after the rate of Consumer Prices Index inflation increased to 3% in January, according to the Office for National Statistics.
The Chancellor said: 'Getting more money in people's pockets is my number one mission. Since the election we've seen year on year wages after inflation growing at their fastest rate – worth an extra £1,000 a year on average – but I know that millions of families are still struggling to make ends meet.
'That's why we're going further and faster to deliver economic growth. By taking on the blockers to get Britain building again, investing to rebuild our roads, rail and energy infrastructure and ripping up unnecessary regulation, we will kickstart growth, secure well-paid jobs and get more pounds in pockets.'
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