Double boost for savers with lower CPI and higher fixed rates

Now that CPI has fallen from 2.9% in March to 2.3% in April, savers, whether they be basic or higher rate taxpayers will at last be to able find an account where they can preserve the spending power of their nest egg.

2.3% equates to a gross rate of 2.875% for a basic rate tax payer and 3.83% for a high rate taxpayer.

However with even the best deals on instant access savings struggling to offer much above 2% gross, it is the rejuvenated fixed rate savings market that savers should be heading for.

It is good news for those that have seen their savings rates tumble since the heady days of 7 per cent rates last autumn, but there's a long way to go yet, especially for those who have had to resort to spending their capital just to make ends meet.

Those account balances will take time to rebuild although at least it's a brighter picture than we've seen for a while. I'm sure a lot of people had given up on the savings habit in 2009 but now have a greater incentive to start salting money away once more.

Whilst the RPI is firmly in negative territory following the fall in mortgage costs, for those without a mortgage and living on a fixed income the struggle is still not over, especially with oil and petrol prices starting to creep up again.

With fixed rate bonds offering 4.3% for a 16 month term you have to question the wisdom of tying your money up for a five year term just to bag an extra 0.1%. The odds are that rates will rise, but the big question is when and by how much.