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The average UK saver has seen nearly £3,000 wiped off their savings in real terms over the past five years, as inflation outpaced interest rates, new research reveals.

Between June 2020 and June 2025, the value of the average UK savings account has dropped by £2,991, according to findings from personal finance site Finder.

The survey, which looked at the savings habits of UK adults, revealed that the typical saver has just over £16,000 in their account. Had savings rates kept pace with inflation during this period, that amount would now be worth £20,287. However, with savings rates lagging far behind rising inflation, the actual value is almost £3,000 lower.

If someone had deposited £16,067 in a typical variable cash ISA in June 2020, it would now stand at just £17,296. Over the last five years, inflation has exceeded the average variable cash ISA rate for 51 out of 60 months, meaning for 85% of the time, savings have been eroded by the rising cost of living.

Every adult has a £20,000 ISA allowance for 2025/26 and it's possible to use all or part of that ISA allowance to invest in the stock market.

Lower fees stocks and shares ISA can be found in platforms such as Trading 212, where you need only £1 to open and will get up to £100 in free shares. It has no cost to open and zero fees.

More established platforms charge fees but have a track record of delivering results. You can open a stocks and shares ISA with AJ Bell with at least £500 or £25 a month. It will cost you 0.25% a year on the total amount invested and there is a £1.50 fee to buy and sell funds and a £5 fee to buy or sell shares.

With do-it-yourself platforms, you need to do your own research before deciding what to invest in, build your own portfolio and keep track of it.

You can also go with managed stocks and shares ISAs, a type of investment ISA that is ideal for beginners as it does the work for you. You answer a few questions about how comfortable you are with risk and what you want to get out of the product, decide how much to put in, then a professional does all the work of picking shares for you.

Hargreaves Lansdown, for example, has a managed product where you can start with a lump sum of £100 where the fund managers take care of the day-to-day investment decisions.

The primary inflation measure, the consumer price index (CPI), stood at 3.6% in the 12 months to June, well above the BoE's 2% target.

Kate Steere, personal finance expert at Finder, said: “Inflationary pressures continue in 2025, with inflation rising unexpectedly to 3.6% this month, well above the Bank of England’s 2% target.

So-called ‘awful April’ saw the sharpest increase in inflation since October 2022, and figures released today show this has not yet eased. In fact, analysts are largely predicting inflation to stay above 3% for the rest of the year.

“At the same time, our research found that nine popular banks, including the 'big four', have either slashed or scheduled a drop in their rates since the last base rate cut. These inflation figures may stall a further cut in August – but the Bank of England governor has hinted about a 'downward path'.