Savers’ woes: Inflation is robbing average Brit of £5k every 7 years

Savers’ woes: Inflation is robbing average Brit of £5k every 7 years

LEFT IN THE DUST: INFLATION BEATS AVERAGE BRIT SAVERS IN RACE TO £5K BY FOUR YEARS

 

  • Inflation is clawing back £5k from the average Brit every 7 years
  • Current savings rates mean it would take 11 years to earn that in interest
  • The pressure is on to protect nest eggs from significant erosion

 

London, 13 September 2017 – Inflation is robbing the average UK saver of £5k four years quicker than they can earn it, fixed-rate bond provider Minerva Lending PLC revealed today.

The average UK saver faces an 11-year wait to make £5,000 in interest but will lose that amount in just 7 years thanks to inflation.

The average Brit has £26,180 in savings1 and at the best available instant access savings rate of 1.6%2, it would now take them 11 years to make £5,000.

However, thanks to the rise in inflation over the past year, analysis shows CPI of 2.9% will destroy that amount of value in just 7 years3.

Ross Andrews, Director, Minerva Lending plc, said:

“This really does underline the extent of the savings risk. inflation wins the race hands down as it stands which is a huge headache for savers, whose household finances receive a triple blow from a squeeze on consumer spending.

“The average person will be looking at the effect of inflation now and wondering whether there can be any escape.

“Against such a backdrop, it’s no surprise people are looking elsewhere to keep their money real. But whatever they choose, whether equity-based investments or asset-backed loans, they naturally come with additional risk and so should be examined carefully.”

 

Minerva Lending PLC has recently launched a fixed rate bond offering 7% gross per annum. The asset-backed, 5-year listed bond, pays out interest semi-annually on loans that are typically at a maximum loan to value of 70%. This provides a buffer for the full recoverability of the loan before any capital is put at risk.

As with all investments, capital is at risk and investors may not receive back the full amount of their investment. The Minerva Listed Bond is not covered by the Financial Services Compensation Scheme.

Enter your e-mail address to receive updates straight to your inbox

Sign up to Investment Insights direct to your Inbox...

Categories: Funds, News

About Author