On The Which? Money Podcast, money saving expert Jenny Ross spoke about the difference between inflation and interest rates, and how this can impact someone’s savings
Ms Ross said: “It is really bad news unfortunately if the rate of growth on your savings doesn’t match or outdo the rate of inflation this means your money is going to be losing value in real terms.
“In context, if inflation is three percent for example something that used to cost £10 will now cost £10.30.
“And if you were saving for that item, if you have £10 in a savings account but that was only paying 0.1 percent, your savings are only going to be worth £10.01 so nowhere near enough to keep up with the increase in prices on things that you want to buy.”