Rio Stedford, a financial planning expert at Quilter, has warned that returns are still being worn away despite this rate boost.
She explained: “High inflation can erode the value of savings over time in real terms, while higher interest rates help to grow your savings at a greater rate.
“However, if for example inflation is 10 percent but your bank is only paying a savings interest rate of five percent, then you are essentially losing five percent of your money.
“This can make it more difficult to meet financial goals, such as buying a home or saving for retirement.”
