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Savings Accounts and Investment Rates in the UK

Investment rates in the UK generally influence savings accounts. It all depends on the type of account you actually opt for, but below the key features and instant access the amount you receive upon return will depend entirely on interest rates, or inflation.

Inflation, to put it simply, is the rate at which things go up in price. If you consider what you could buy with £100 today compared to what you could buy with £100 50 years ago, you'd find yourself a lot better off going back half a century. This is due to inflation, the increase of which makes things more expensive to buy and reduces the overall value of currency.

So when the investment rates in the UK drop and dive, so do your savings. As inflation gets higher the actual value of your savings goes down.

When you opt for a savings account keep in mind the current interest rates in the UK and make sure the rate on your account is always higher than the current inflation rate (which can be found on most economic data sites). If you can't find a good rate, opt for one that sounds most likely to pull you through tough times; don't, for example, apply for a savings account that have a good introductory rate which quickly plummets. If the economy is expecting further inflation then you could be in for a real shock.

It's always advisable to keep an eye on current economic news and predicted inflation rates. If there's an atmosphere of potential doom and gloom in the near future, think of your savings account; which one is likely to help your savings survive investment rates in the UK when they take a turn for the worst?

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