Benchmark
Savings vs inflation: the real return on cash in the UK and US
What cash earned after inflation in the UK and the US, using Bank Rate and 3-month Treasury bill rates as the savings rate. Both are a saver’s best case: the full rate, interest added monthly, before tax.
- UK real rate, Aug 2026 0.7% Bank Rate 3.8% − CPI 3.1%
- US real rate, Aug 2026 0.3% T-bill 3.7% − CPI 3.4%
- UK cash since 2010, real £ −22.4% at Bank Rate
- US cash since 2010, real $ −17.3% at T-bill rates
Key takeaways
- The real interest rate on cash in Aug 2026: 0.7% in the UK (Bank Rate less CPI) and 0.3% in the US (T-bills less CPI).
- Since 2010, cash at Bank Rate is down 22.4% after UK inflation; US cash at T-bill rates is down 17.3% after US inflation.
- The UK real rate was below zero in 158 of the 210 months since Bank Rate fell to 0.5% in March 2009.
- Over the whole record since Jan 1975, UK cash at Bank Rate is up 129% after inflation, thanks to the high real rates of the 1980s and 1990s.
UK cash at Bank Rate after inflation
Growth of cash earning Bank Rate, Jan 1975 to Sep 2026, in every lens.
−33.0%UK cash (Bank Rate) after US inflation since 2010−2.4% a year
Up 4.0% in dollars since 2010. After US inflation, down 33.0%. Against money printing, down 62.1%.
In pounds, up 26.7%, or down 22.4% after UK inflation.
- $ nominal
- +4.0%0.2% a year
- £ nominal
- +26.7%1.4% a year
- Real $ (US CPI)
- −33.0%−2.4% a year
- Real £ (UK CPI)
- −22.4%−1.5% a year
- vs US M2
- −62.1%−5.6% a year
- Measured from
- Dec 2009to Sep 2026, 16 years 9 months
- UK cash (Bank Rate), Real $ (US CPI)3,068
- $ nominal3,068
- Sep 2026, latest
Loading the chart. Every figure is also in the table below.
| Period | $ nominal | £ nominal | Real $ (US CPI) | Real £ (UK CPI) | vs US M2 |
|---|---|---|---|---|---|
| Past year from Sep 2025 | +2.5% | +3.9% | −0.6% | +0.8% | −2.6% |
| 5 years from Sep 2021 | +18.3% 3.4% a year | +20.1% 3.7% a year | −3.1% −0.6% a year | −6.0% −1.2% a year | +6.3% 1.2% a year |
| Since 2020 from Dec 2019 | +20.4% 2.8% a year | +20.5% 2.8% a year | −7.6% −1.2% a year | −9.0% −1.4% a year | −20.8% −3.4% a year |
| 10 years from Sep 2016 | +24.9% 2.2% a year | +22.5% 2.1% a year | −10.0% −1.0% a year | −13.7% −1.5% a year | −30.2% −3.5% a year |
| Since 2010 from Dec 2009 | +4.0% 0.2% a year | +26.7% 1.4% a year | −33.0% −2.4% a year | −22.4% −1.5% a year | −62.1% −5.6% a year |
| 20 years from Sep 2006 | +1.3% 0.1% a year | +42.9% 1.8% a year | −38.7% −2.4% a year | −19.9% −1.1% a year | −69.8% −5.8% a year |
| Since 2000 from Dec 1999 | +60.3% 1.8% a year | +95.1% 2.5% a year | −19.5% −0.8% a year | −1.4% −0.1% a year | −68.1% −4.2% a year |
| Since Jan 1975 first month in our data | +1,188% 5.1% a year | +2,213% 6.3% a year | +100% 1.4% a year | +129% 1.6% a year | −50.0% −1.3% a year |
US cash at Treasury bill rates after inflation
Growth of cash earning the 3-month T-bill rate, Jan 1934 to Sep 2026, in every lens.
−17.3%US cash (3-month T-bills) after US inflation since 2010−1.1% a year
Up 28.3% in dollars since 2010. After US inflation, down 17.3%. Against money printing, down 53.2%.
In pounds, up 56.3%, or down 4.2% after UK inflation.
- $ nominal
- +28.3%1.5% a year
- £ nominal
- +56.3%2.7% a year
- Real $ (US CPI)
- −17.3%−1.1% a year
- Real £ (UK CPI)
- −4.2%−0.3% a year
- vs US M2
- −53.2%−4.4% a year
- Measured from
- Dec 2009to Sep 2026, 16 years 9 months
- US cash (3-month T-bills), Real $ (US CPI)2,365
- $ nominal2,365
- Sep 2026, latest
Loading the chart. Every figure is also in the table below.
| Period | $ nominal | £ nominal | Real $ (US CPI) | Real £ (UK CPI) | vs US M2 |
|---|---|---|---|---|---|
| Past year from Sep 2025 | +3.7% | +5.1% | +0.6% | +2.0% | −1.4% |
| 5 years from Sep 2021 | +20.8% 3.8% a year | +22.6% 4.2% a year | −1.1% −0.2% a year | −4.0% −0.8% a year | +8.6% 1.7% a year |
| Since 2020 from Dec 2019 | +21.2% 2.9% a year | +21.2% 2.9% a year | −7.0% −1.1% a year | −8.4% −1.3% a year | −20.3% −3.3% a year |
| 10 years from Sep 2016 | +27.5% 2.5% a year | +25.1% 2.3% a year | −8.1% −0.8% a year | −11.9% −1.3% a year | −28.7% −3.3% a year |
| Since 2010 from Dec 2009 | +28.3% 1.5% a year | +56.3% 2.7% a year | −17.3% −1.1% a year | −4.2% −0.3% a year | −53.2% −4.4% a year |
| 20 years from Sep 2006 | +37.7% 1.6% a year | +94.3% 3.4% a year | −16.6% −0.9% a year | +8.9% 0.4% a year | −59.0% −4.4% a year |
| Since 2000 from Dec 1999 | +67.9% 2.0% a year | +104% 2.7% a year | −15.7% −0.6% a year | +3.3% 0.1% a year | −66.6% −4.0% a year |
| Since Jan 1934 first month in our data | +2,265% 3.5% a year | –a (see note a) | −6.8% −0.1% a year | –b (see note b) | –c (see note c) |
- a History starts Jan 1971.
- b UK CPI starts Jun 1947.
- c US M2 starts Jan 1959.
Real interest rates by decade
The policy rate less CPI inflation over the previous 12 months, averaged across each decade, and the share of months below zero.
A savings rate only beats inflation when it is higher than the rise in prices over the same year. In August 2026 Bank Rate averaged 3.8% against UK CPI inflation of 3.1%, a real rate of 0.7%. US Treasury bills paid 3.7% against US inflation of 3.4%: 0.3%.
The decade table shows how far that has moved. UK cash earned a real 4.6% a year on average in the 1980s and −1.7% in the 2010s, when the real rate was negative in 86% of months. A negative real rate means the interest did not cover the rise in prices.
These are policy rates, not the rates on a typical savings account. Easy-access accounts have usually paid less than Bank Rate, and interest is taxed above the personal savings allowance, so most savers’ real rate was lower than the table shows.
| Decade | UK real rate | UK negative | US real rate | US negative |
|---|---|---|---|---|
| 1950s | – | – | −0.1% | 38% |
| 1960s | – | – | 1.6% | 0% |
| 1970s | – | – | −0.8% | 67% |
| 1980s | 4.6% | 8% | 3.3% | 8% |
| 1990s | 4.5% | 0% | 1.8% | 7% |
| 2000s | 2.5% | 13% | 0.1% | 44% |
| 2010s | −1.7% | 86% | −1.2% | 86% |
| 2020s to Aug 2026 | −1.4% | 56% | −1.1% | 52% |
“Negative” is the share of months in the decade with a real rate below zero. UK figures start in 1975, when the Bank Rate series begins. Before 1989 UK inflation is measured with the long-run RPI.
What £10,000 or $10,000 in cash became
A lump sum left at the policy rate from each December close, before and after inflation.
£10,000 left at Bank Rate from the December 2009 close grew to about £12,668 by Sep 2026. After UK inflation it buys what £7,763 bought in 2009, a loss of 22.4% in buying power.
Start in December 1989 instead and the result turns: the same £10,000 is about £42,626 now, worth £15,851 in 1989 pounds, because rates stayed well above inflation for most of the 1990s.
In dollars, cash at Treasury bill rates is down 17.3% after US inflation since 2010 and down 6.8% since Jan 1934, so over the whole record T-bills fell slightly behind US prices.
| From | UK, £ now | UK, real | US, $ now | US, real |
|---|---|---|---|---|
| Dec 1979 | £136,562 | £27,041 | $65,585 | $15,017 |
| Dec 1989 | £42,626 | £15,851 | $27,241 | $10,255 |
| Dec 1999 | £19,512 | £9,864 | $16,787 | $8,434 |
| Dec 2009 | £12,668 | £7,763 | $12,829 | $8,270 |
| Dec 2019 | £12,045 | £9,101 | $12,123 | $9,300 |
“Real” restates today’s pot in the money of the start month, so it compares directly with the 10,000 put in.
Sources and assumptions
Where the figures come from and what they leave out.
- UK cash: Bank of England Bank Rate, monthly average (IADB series IUMABEDR), from January 1975. Reused with attribution.
- US cash: 3-month Treasury bill rate, secondary market, monthly average (Federal Reserve H.15, via FRED), from January 1934.
- Each month adds one-twelfth of that month’s annual rate. No tax, fees or account limits are taken off.
- Real figures divide by UK CPI (ONS, joined to the long-run RPI before 1988) and US CPI (BLS). The real rate is the policy rate less CPI inflation over the previous 12 months.
- Easy-access savings accounts have usually paid less than Bank Rate, so the cash lines here are higher than most savers received.
Cash savings: questions
Worked out from the same monthly data as the tables. Educational information, not financial advice.
Have savings beaten inflation?
Over the long run, cash at the full Bank Rate just about has: up 129% after UK inflation since Jan 1975. Since 2010 it has not: down 22.4%. US cash at Treasury bill rates is down 17.3% after US inflation since 2010. These are best cases, at the policy rate and before tax.
What is the real interest rate on savings now?
On the latest monthly figures (Aug 2026), Bank Rate of 3.8% less UK CPI inflation of 3.1% gives a real rate of 0.7%. In the US, the 3-month Treasury bill rate of 3.7% less US CPI of 3.4% gives 0.3%. An account paying less than the policy rate has a lower real rate.
How often has the real rate on cash been negative?
Since March 2009, when Bank Rate was cut to 0.5%, the UK real rate was below zero in 158 of 210 months (75%). In the US, since January 2009, the T-bill real rate was negative in 146 of 211 months (69%).
Why use Bank Rate and Treasury bills instead of savings rates?
They have unbroken monthly records (Bank Rate from 1975 in the Bank of England database, T-bills from 1934), and they are close to the most a saver could earn on cash without locking it away. Average savings rates were lower, so the figures here flatter a typical saver.
Important information
Capital at risk. The value of investments can fall as well as rise and you may get back less than you invest. Past performance is not a reliable indicator of future results. Educational information only, not financial advice. Read our disclaimer.