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Savers have been urged to take action as high inflation continues to eat into the value of their savings. Goncalo Machado, digital transformation lead at InvestEngine, said many analysts are

predicting the base interest rate will peak at around six percent and will not fall below 4.5 percent until 2027. He said this will likely mean “higher interest rates” for savers but he

urged people not be complacent about the growth from their savings. He told Express.co.uk: “While interest rates on these savings accounts are higher than they’ve been for many years, they

lag behind the current rate of inflation, meaning your money is still being eroded over time. “As well as this, high interest rates are only intended to be temporary as a means of curbing

inflation, with the Bank of England aiming to keep inflation at a target of two percent.” The latest figures for inflation, for the year to June 2023, showed the rate of price increases

remained at 8.7 percent, well above the top rates for many fixed term savings accounts and ISAs. Savers should note if they keep their money in savings accounts over time, the interest they

earn will compound and can potentially beat inflation. Mr Machado spoke about the savings options people can look at in their efforts to make a real-terms return on their savings. He said:

“Those looking to save in the long-term could be better off putting their money into an investment-focused account such as a Stocks and Shares ISA.” The finance expert spoke about the

benefits of investment-based savings. He said: “Investing has been proven over time to be the only credible way of beating inflation for long-term savers. “Innovation in the investment space

is making it even easier for savers to level up into becoming investors, supplementing their savings with easy access and automated investing to help grow their wealth over the long-term.

“Similarly, investments such as exchange traded funds (ETFs), are a great category for savers to explore, offering low costs, broad diversification and easy access, they’re great for savers

looking to get into investing.” ISAs have key tax advantages, as a person does not pay tax on any interest or investment growth from an ISA, and they do not pay tax on any income they derive

from an ISA. A person can deposit up to £20,000 each year into one or several ISAs and they can transfer over ISA funds from a previous year into a new ISA account, without affecting this

year’s allowance. The base interest rate is currently five percent with many analysts predicting it could peak at six or even seven percent later this year. FOR THE LATEST PERSONAL FINANCE

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