Inflation hits 3.8% - advice for savers?

Higher inflation usually means interest rates stay higher for longer — good news for savers, if they’re actually getting the best rates.

The problem is, too many people leave their money sitting in high-street banks that consistently rip them off. Research from Paragon Bank shows those banks often pay around 3% less than the top rates available.

For the average saver with £16,000, that’s nearly £500 a year — or about £10 every single week — in lost interest. Put bluntly, if you’re still saving with a high-street bank, you’re effectively handing them a tenner a week straight out of your own pocket.

Higher inflation makes it harder for cash to keep its real value. Savers should shop around now because the best deals rarely last long. Many fixed-rate accounts already price in the expectation of lower rates next year, so locking in can give certainty if you don’t need instant access. For short-term money, flexibility matters more than squeezing out the last 0.1%. Don’t forget tax wrappers: ISAs and premium bonds can make a real difference once your interest starts pushing you into a tax bill.