Brits ignorant of inflation and tax

A new study has revealed that British savers are largely ignorant about how the effects of inflation and tax affect them.

According to research by the government-backed investments body National Savings and Investments (NS&I), many savers suffer from a lack of knowledge on the issue, despite the credit crunch and its effects.

John Prout, NS&I's Sales Director, said, "It is concerning that many people don't understand what inflation is, or how it might affect decisions about saving or spending money."

"It appears that an understanding of the impact of inflation and tax on savings increases as we get older."

The research revealed that almost half of under-24s (45%) have no idea how tax affects their savings, while only 16% of those above 55 admitted to being ignorant on the issue.

Overall, almost one in ten (9%) said they didn't know what inflation was at all, while some 28% revealed that they had no idea how tax affects their savings.

The study polled a representative sample of 1,009 British adults.