The UK is facing its worst inflation for 19 years after the Consumer Prices Index (CPI) and Retail Prices Index accelerated from 3.4 per cent to 3.7 per cent and 4.4 per cent to 5.3 per cent respectively in April.
This could encourage a number of people to free up some of the cash tied up in the value of their homes to boost their income as the general cost of living looks set to rise.
According to financial news service The Motley Fool, there is little sign of the inflation rate subsiding any time soon, a situation which is made worse as UK households were dealing with deflation in 2009.
David Kuo, the website’s director, said the figures are bad news for the UK’s savers.
"Savers with money in the bank must be alert to the dangers of inflation. At current rates, a basic-rate taxpayer will now need to find a savings account paying at least 4.63 per cent just to keep pace with the CPI," he said.
"It is sometimes said that monthly inflation data only provides a quick snapshot of the economy. However, when eight successive snapshots all point to rising inflation then we have the makings of a horror movie for savers."
Homeowners who are concerned about how rising inflation will affect their income can find out the value of their property could boost their finances with equity release advice from Key Retirement Solutions.
Posted by Tom Papworth
