Savings efforts 'being undermined by inflation'

Inflation is undermining the efforts made by people to save more following the recession, an expert has said.

The effort made by people to put more money into their savings accounts in the aftermath of the global economic downturn is being damaged as the worth of these funds is dropping, an expert has said.

Many Britons have increased the amount they are putting away into products such as fixed rate bonds and ISAs in recent times in order to give themselves more funds for the future following the recession.

For example, a study by the Post Office last week revealed that some 84 per cent of the population are now saving more for the coming years.

However, according to Jason Riddle, co-founder of action group Save Our Savers, many people are being forced to endure a negative return on the cash they put away due to factors such as the country's consumer price index.

"Savers who have always managed their budgets with an eye on their future financial position - in the same the way the government is trying to do now - are seeing their efforts undermined as the real value of their savings decline," he said.

By Joe Letts