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Savers unaware of inflation and tax
23 July 2008
British savers suffer from a lack of knowledge about the implications of inflation levels and tax rates, according to a new study.
Research by National Savings and Investments (NS&I) revealed that nine per cent of people said they did not know what inflation was at all while 28 per cent of consumers admitted to having no idea how tax affected their savings.
John Prout, NS&I's sales director said, "It is concerning that many people don't understand what inflation is, or how it might affect decisions about saving or spending money."
The study showed that financial knowledge increases with age while 41 per cent of people aged between 16 and 24 were unsure about the effects of inflation this number dropped to 17 per cent when consumers were aged over 55.
"It appears that an understanding of the impact of inflation and tax on savings increases as we get older," said Mr Prout.
Research by Nationwide revealed that only 50 per cent of consumers save on a regular basis.
