- ONS data shows the Consumer Price Index is up 6.4% on last year
- Costs of items and services remain high despite drop in inflation
- Experts reveal tips to build savings despite higher outgoings
Financial experts have advised on how best to prevent expensive everyday items and services from destroying your savings, following the ONS’ report* of increased consumer prices.
The data, released today, shows that core consumer prices (excluding energy, food, alcohol and tobacco) rose by 6.4% in the 12 months up to July 2023, while the annual rate for consumer services in that month was 6.5%, up from 6.3% in June.
Despite easing inflation causing the Consumer Prices Index (CPI) for July to be lower than the rate of 7.9% in June, down from a peak of 11.1% in October, the overall annual increase shows that Brits are still shelling out more for food, household bills and other commodities and services compared to last year.
Savings experts at money.co.uk/savings-accounts today revealed how you can minimise the negative financial impact of this and maximise your savings despite higher outgoings compared to previous years.
Lucinda O’Brien, expert at money.co.uk savings accounts, said: “The ONS’ report on consumer prices is bad news for long-term savings, as higher outgoings on everyday items and services see savings increasingly pushed to the bottom of Brits’ financial priority list.
“Despite seeing a slight decline in the rate of these prices compared to last month, thanks to the inflation rate dropping from 7.9% to 6.8%, it will likely take some time for the CPI to return to that of last year – if at all.
“So it’s vital to not delay starting to build your savings pot – in fact, the higher cost of necessities means you need a savings pot to fall back on more than ever – so remind yourself, if not now then when?
“While nothing can be done about the price of consumer items, it is possible to cut back on unnecessary purchases that could be running your monthly expenditure up at a time when every pound counts – so have a look into your spending and set yourself a realistic monthly budget.
“It’s also crucial to make your money work for you, by putting money away in a high-yield savings account rather than letting it sit in a current account, missing out on money earned in interest.
“An instant access savings account will allow you to withdraw money as and when you need to, without incurring any penalties, so you can still build your savings while being able to access the money if unexpected costs come up.
“For example, Hampshire Trust Bank is currently offering 4.55% AER variable on their Online Easy Access Account that has no notice, penalties, charges or limits on withdrawals.”
For more information and guidance on saving, including the best savings rates available today, visit: https://www.money.co.uk/savings-accounts
