Inflation remained at 1.5% in November 2019, according to the latest figures from the Office for National Statistics (ONS).
The Consumer Price Inflation (CPI) also measured 1.5% in October, and it's the lowest rate we've seen for three years.
Which? explains why inflation has stayed the same, and where to find the best savings rates to keep up with it.
Inflation has stayed the same despite the rising cost of recreation and culture, as well as food, as these rises were offset by price falls in motor fuels, restaurants and hotel costs as well as the prices of alcohol and tobacco.
The graph below shows how CPI inflation has fared over the past few years, using figures from the ONS.
The Bank of England is tasked with keeping inflation as near to 2% as possible. So far in 2019, it has managed to keep fairly close to the benchmark.
Inflation peaked at 3.1% in November 2017, and at the time no savings account paid a rate that could beat it.
The situation is much better for savers now, with inflation at its lowest level since November 2016 when it was 1.2%.
The table below sets out the top-rate and savings accounts ordered by length of term and then by interest rate. We've included a column that will tell you if the account can beat November's inflation rate.
|Account type||Account||Interest rate (AER)||Terms||Does this account beat November 2019 inflation?|
|Five-year fixed-rate savings account||United Bank UK Five-Year Fixed-Term Deposit||2.38%||£2,000 minimum initial deposit||Yes|
|Five-year fixed-rate cash Isa||United Bank UK Five-Year Fixed-Rate Cash Isa||2.03%||£2,000 minimum initial deposit||Yes|
|Four-year fixed-rate savings account||Bank of London & The Middle East Four-Year Premier Deposit Account||2.1% (EPR*)||£1,000 minimum initial deposit||Yes|
|Four-year fixed-rate cash Isa||United Trust Bank Cash Isa Four-Year Bond||1.75%||£15,000 minimum initial deposit||Yes|
|Three-year fixed-rate savings account||Bank of London & The Middle East Three-Year Premier Deposit Account||2.1% (EPR*)||£1,000 minimum initial deposit||Yes|
|Three-year fixed-rate cash Isa||Aldermore Three-Year Fixed-Rate Cash Isa||1.7%||£1,000 minimum initial deposit||Yes|
|Two-year fixed-rate savings account||Bank of London & The Middle East Two-Year Premier Deposit Account||1.95% (EPR*)||£1,000 minimum initial deposit||Yes|
*Expected Profit Rate. Source: Which? Money Compare. Correct 17 December 2019, but rates are subject to change.
To beat the current rate of inflation you'd need to lock up your savings for at least one year in a fixed-term savings account or cash Isa.
Longer-term savings currently pay a much higher rate than inflation, but there's always a chance that rates may improve during the time your savings are locked away - if that happens, you won't be able to take advantage of better deals, or may have to pay a penalty to withdraw your cash early.
Many of the top deals are from providers. These firms offer an Expected Profit Rate (EPR) rather than an annual equivalent rate (AER). The rate is not guaranteed and could be adjusted at any time - however, at the time of writing we have not heard of an instance where an advertised EPR has not been paid.
According to Moneyfacts, the number of products that can beat the Bank of England's base rate - which is currently 0.75% - is at its lowest point in two years.
While there are currently 1,254 accounts that pay more than 0.75% AER, this is the lowest number since March 2018 when 1,251 deals beat this rate.
The current base rate is far lower than CPI inflation. While this has been declining all year, so have savings rates.
The graph below shows how average long-term savings and cash Isa rates (lasting 18 months or more) have compared to the rate of CPI inflation throughout 2019, using data from Moneyfacts and the ONS. The rate for inflation in December will be announced in January 2020.
As the graph shows, it hasn't been a good year for savings rates, with averages falling around 0.3% since January - albeit after a very slight rise in March.
The difference is even starker when you look closer at the top rates in each category.
In January, the top rate on a five-year fixed-term savings account was 2.75% AER, and the top 10 rates for this term all paid 2.6% AER or above. But now, the highest rate around is 2.37% AER, and the top 10 includes several accounts that pay just 2.1% AER.
Meanwhile, top one-year savings accounts are down 0.35%.
Top-rate five-year Isa dropped from 2.26% AER in January to 2.09% AER in December, however, things aren't so bad with short-term cash Isas (that last up to a year), where top rates have only reduced by 0.1%.
Instant-access accounts rates are the only ones that have held up, with top rates reducing by just 0.05% over the year.
The good news is that inflation has fallen too - so, while savings rates are poor there are options that won't erode your cash.
CPI inflation tracks the prices of around 700 popular goods and services, from flights to Frosties cereal, held in an imaginary shopping basket.
The figure that is released each month shows how the price of everything in the basket has collectively changed in comparison with the same month of the previous year. So, if you had bought all of the goods and services in November this year, you'd have paid 1.5% more than in November 2018.
This affects the buying power of your savings. If your interest rate doesn't equal or exceed inflation, your savings will effectively lose value over time, as you'll be able to buy fewer things with the same amount of cash.
That's why it's important to make sure your money is held in an account that beats inflation.
You can search through hundreds of cash Isa and savings accounts with Which? Money Compare. This details the interest and terms of an account, as well as how it rated in our unique savings survey and also lists those accounts that achieved Which? Recommended Provider status.
Which? Recommended Providers are companies that have been rated highly by customers and offer products that meet the exacting standards of our expert researchers.
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