In an article in the Financial Times, Haig Bathgate comments on the challenges facing savers due to current low interest rates and high inflation.

Present conditions are undermining the value of cash deposits, leaving savers with large sums few secure options to earn a real return on their money. Bank customers can earn up to 8 per cent in regular savings accounts, but such accounts do not permit lump sum deposits. Savers with larger amounts from the sale of a house or business, for example, have less opportunity to beat rising prices.

In the past, savers with large sums looking for secure, fixed income would turn to money market accounts, which require a high minimum balance, or short-dated gilts.

But advisers say returns from both sources are now negligible, especially for higher-rate taxpayers.

"We use money market accounts from time to time," said Haig Bathgate, chief investment officer at Turcan Connell."But at the moment the rates of return are miserly."

Short-dated gilts are also offering low returns following the Bank of England's quantitive easing programme.

The next maturing gilt, the Treasury 4.5 per cent 2013 issue, has a yield to maturity of just 0.19 per cent, if bought at the current market price.

Bathgate believes savers are better off choosing enhanced retail deposit accounts.

To read the article in full, click here.

This content was generated prior to Turcan Connell Asset Management Limited operating as Tcam.