Leeds guarantees real return above soaring inflation

As the rate of inflation soars to a 16-year high and base rate falls below the rate of inflation for the first time since 1981, savers may begin to suffer from a negative real return.

Against this background, Leeds Building Society's Inflation Buster Bond and ISA offer peace of mind and guarantee to deliver a return to beat inflation.

The Inflation Buster Bond and ISA pay the Retail Price Index (RPI), which is the official measure of how much goods and services bought by an average UK household changes, plus a fixed interest rate. Investors in Leeds Building Society's first issue of its Inflation Buster Bond recently celebrated an annual return of 7.32% on the first anniversary of their innovative savings account.

Karen Wint, General Manager Marketing & Customer Services at Leeds Building Society said, "The take up of this product has been very successful and we have launched a number of consecutive issues since. We have also developed an extremely popular Inflation Buster ISA, which pays interest tax-free.

"The current Inflation Buster Bond and ISA guarantee to pay RPI plus 1.80%. The RPI figure for September is 5.00%, which is higher than the August figure of 4.80%. If RPI over the period is 5.00%, Leeds Building Society's Inflation Buster Bond and ISA would pay a return of 6.80%."

"This is the equivalent of 8.50% for basic rate tax payers and an impressive 11.33% for higher rate tax payers with the tax-free Inflation Buster ISA. In addition, investors who have already paid in the maximum £3,600 in this tax year can still invest in the tax-free version. This is because our Inflation Buster ISA has the option to transfer previous years' ISA subscriptions and some customers, who have paid in the maximum allowance each year, may have built up a capital balance of £39,600 plus interest."
The Bank of England's decision to cut Base Rate by 0.50% to 4.50% will begin to filter through into the market and could result in investors struggling to achieve a real return from their savings.

Karen added, "It is clear to see why the Inflation Buster Bond and ISA are increasingly part of a saver's investment portfolio as they look to guarantee a rate above inflation. There is also the opportunity to put further savings into the Inflation Buster Bond, which has a maximum investment of £1,000,000 and £2,000,000 for joint accounts."