Savers thrown a lifeline at last

uSwitch.com welcomes NS&I's new index-linked savings certificates as they could prove a lifeline for struggling savers, giving them guaranteed growth.

Stefan Maryniak, personal finance expert at uSwitch.com, says: "At the moment savers feel like they're fighting a losing battle. The average easy access savings account pays just 0.88%. Those who are able to utilise their tax-free ISA allowance will do slightly better, getting an average 2.61% return for their money. But all these rates fall far below the current rate of inflation at 4% meaning they are making little money in real terms.

"However, the launch today of NS&I's Index-linked Savings Certificates may be the lifeline savers have been waiting for. Because the rate is linked to the Retail Price Index (RPI), consumers will see their spending power grow each year, whatever happens to the cost of living. These are a good option giving savers the opportunity to make more on their money while inflation is high. But savers will have to move fast, as these certificates are expected to prove too good to last.

"The only drawback to the plan is that consumers will have to tie their money up for 5 years. This may be too long for many savers, who may need access to money at short notice, especially in the current employment market. But, for those who can lock away some spare cash, this new way of saving may be just the ticket."