Despite a drop in inflation, Britain’s savers are still struggling, Calum Bennie, savings spokesman for Scottish Friendly, has warned.
He said: “Yet again, inflation has dropped, this time by a relatively significant amount, indicating that interest rates will not rise too sharply soon.”
According to Scottish Friendly’s latest disposable income index, people currently have just 8 per cent of their salaries left over each month after essentials are paid for.
Mr Bennie said: “Even with this drop in inflation, prices continue to rise ahead of wage increases, and many could in fact feel worse off as we enter the festive season. Squirreling a few pounds away regularly helps build a safety net, which can be utilised when interest rates do eventually start to rise.”
Adviser view
Matt Pitcher, executive partner for national advisory firm Towry, said: “The news may put a strain on those saving for retirement. Low inflation means low wage increases – and ultimately the government will need to fund the rises owed to pensioners from the taxpayers’ purse.”
Proposed increases for 2015/16 (Source: Towry)
| 2014-15 tax year | 2015-16 tax year | Increase determined by |
Basic state pension | £113.10 per week | £115.93 per week | Triple lock – likely to be 2.5% |
ISA | £15,000 | £15,180 | Consumer price index increase of 1.2% |
Junior ISA | £4,000 | £4,048 | CPI increase of 1.2% |
Pension Credit | £variable – standard amount is £148.35 | £TBC | Rise in average weekly earnings – announcement due 15/10/14 |
Disability benefits | £variable (between £21.55 and £81.30 per week) | £TBC | Rise in average weekly earnings – announcement due 15/10/14 |
Capital Gains Tax | £11,000 | £11,100 | 1% |
Inheritance Tax nil rate band | £325,000 | £325,000 | Frozen until 5 April 2018 |
