The impact of inflation
Inflation measures how much the price of things is going up. If you had a savings account paying 0.5% and inflation was running at 0.6% then the purchase power of the money in your savings account would actually be going down rather than increasing.
This month, the UK inflation rate rose by 1.1% to a 10 year high of 4.2%. That’s partly why financial experts recommend that people maintain a financial portfolio balanced between savings and investments.