Current savings rates mean it would take 11 years to earn that in interest. The pressure is on to protect nest eggs from significant erosion. Comment from Ross Andrews, Director, Minerva Lending plc.

Inflation is robbing the average UK saver of £5k four years quicker than they can earn it, fixed-rate bond provider Minerva Lending PLC revealed. The average UK saver faces an 11-year wait to make £5,000 in interest but will lose that amount in just seven years thanks to inflation.

The average Brit has £26,180 in savings and at the best available instant access savings rate of 1.6 percent2, it would now take them 11 years to make £5,000.

However, thanks to the rise in inflation over the past year, analysis shows CPI of 2.9 percent will destroy that amount of value in just 7 years.

Ross Andrews, Director, Minerva Lending plc, said: “This really does underline the extent of the savings risk. inflation wins the race hands down as it stands which is a huge headache for savers, whose household finances receive a triple blow from a squeeze on consumer spending. The average person will be looking at the effect of inflation now and wondering whether there can be any escape.”

“Against such a backdrop, it’s no surprise people are looking elsewhere to keep their money real. But whatever they choose, whether equity-based investments or asset-backed loans, they naturally come with additional risk and so should be examined carefully.”