Poor savings

Do you know how much interest your money must earn to beat the effects of tax and inflation? The banks who offer savings accounts clearly do not

How else can we explain the fact that one in four of them fails to offer a single account which gives savers a real rate of return, according to Bates Investment Services, the independent financial adviser?

If you are a higher rate tax payer, you need to earn 4.17 on your savings to get a real rate of return, and 2.78 per cent if you are a basic rate payer. But if you have a savings account with the likes of HSBC and Royal Bank of Scotland, among others, the purchasing power of your cash will be eroded by their paltry rates.

A huge 70 per cent of the savings accounts on the market offer insufficient rates for higher rate tax-payers to make a real return.

But the Bates survey found that there are some good guys. You might find an account that keeps your savings on track from Bank of Scotland, Capital One Savings, Egg, IF, ING Direct and Liverpool Victoria. Or you can look for the best rates at on moneysupermarket.