The latest inflation rate figures from the Office for National Statistics (ONS) demonstrate the climate today's savers are contending with.
According to the ONS figures, the consumer prices index stood at 2.7 per cent in November for the second consecutive month.
This remains above the Bank of England's target rate of two per cent, with the retail prices index falling just 0.2 per cent from October to three per cent last month.
Dr Ros Altmann, director-general of the over-50s organisation Saga, has drawn attention to the impact inflation has on savers and the wider economy.
She said: "The fact that inflation is still above the Bank of England's two per cent inflation target is dreadful for savers as the combination of low interest rates and high inflation has disastrous effects on disposable incomes."
Dr Altmann explained that the spending power of millions of households is curbed by the high rate of inflation, suggesting that monetary policy has "damaged significant parts of the economy".
The main way in which high inflation hurts the economy, according to Dr Altmann, is that it puts a cap on consumers' purses so they cannot spend enough to give the economy the boost it needs.
"Our report shows that each quarter, older people are cutting back on their spending as a result of high inflation," she said.
However, it can also erode the value of an individual's savings, which is why a fixed rate savings account can prove particularly valuable in a volatile market.
These accounts are designed to protect hard-earned cash from inflation, with Aldermore offering great rates even when inflation fluctuates.
Saga's final quarterly report, based on studies by the Centre for Economics and Business Research, showed that inflation has surged 18.1 per cent since September 2007.
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