Best inflation-beating savings accounts to make your money work hard

Billions of pounds are being eroded by inflation as savings are left languishing in accounts paying low interest rates.

The total balance of adult savings accounts failing to beat inflation has surged by almost £200 billion since January, reaching £660 billion, according to savings app Spring.

Official figures show UK inflation rose to 3.6% in June, up from May’s figure of 3.4% and still high above the 2% target. Inflation stood at 3% in January 2025.

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The number of accounts failing to beat CPI inflation has increased by nine million since the start of the year, Spring estimates, with 67.6 million adult savings accounts now earning 3.5% or below.

Derek Sprawling, head of money at Spring, said the analysis “should be a wake-up call for savers”, adding: “It’s time to review where your money is held and ensure it’s working harder for you.”

Sprawling urged savers to look for providers that offer rates above 3.6% as “anything less means your savings are losing value in real terms”.

There are currently 1,280 inflation-beating savings accounts on the market right now, according to the latest data from Moneyfacts.

The best one-year fixed-rate accounts offer up to 4.6% interest, while the top easy-access savings accounts pay up to 5%.

Savers who not only want to make the most of above-inflation interest rates but also want to shield their savings income from the taxman can make the most of the best cash ISAs on the market right now, paying up to 4.98% interest for easy-access savings or 4.35% for a one year fix.

The average savings account rate is just 3.51%, according to Moneyfacts, which is below the latest CPI inflation reading.

It could therefore be worth reviewing the rates you’re getting and checking your savings are working as hard as possible. We look at the top savings accounts for rates that beat inflation.

Which are the best savings accounts to beat inflation?