How to beat inflation - Telegraph "The average no-notice savings account pays a miserly 0.92pc, which shows the size of the problem," said Sylvia Waycot from financial information group Moneyfacts. After Isas, the only other inflation-beating accounts require you to tie up your money for the long term - something that many people will be unwilling to do in the current uncertain climate. The shortest term you could tie it up for is two years with NatWest's Isa, but this comes with a catch. You must put the money in by the end of February, but it won't start earning the inflation-beating rate until April, which eats into the return. Of the 47 accounts that beat inflation, just one, the Super Flexible Isa Issue 2 from Santander, allows you to withdraw money instantly with no penalties. This has an interest rate of 4pc, but only if you have an investment product with the bank. Customers in all other instant-access products will see their money losing value. To illustrate how serious this can be, the effect of inflation on savings means that £10,000 invested five years ago, allowing for average interest and tax at 20pc, would have the spending power of just £9,190 today. Experts warned that, despite the fall in inflation, most people were still worse off. Average wage inflation is 1.9pc, but prices are up by 3.9pc according to the retail prices index, or 3.6pc according to the CPI. The reason that inflation looks as if it is falling is that the increase in VAT from 17.5pc to 20pc happened in January 2011, meaning that there was a big spike in prices at the same time last year. This has now fallen out of the comparison, making the rate of increase look far smaller. However, figures showed that if the contribution from the VAT rise was taken out, inflation was 3.6pc in the year to January, up from 2.8pc in December. Most of our unavoidable household bills have risen hugely. For example, gas and electricity saw charges rise by 18.7pc and 13.2pc respectively over the 12 months to January. Rent for homes was 3pc higher in January 2012 than in January 2011. Ros Altmann, the director general of Saga, said it was "far too early to celebrate" over the falling rate of inflation. "Inflation remains almost double the Government's 2pc target rate and we are deeply concerned because it is older people who are suffering most," she said. For example, the average over-fifties RPI inflation figure is still over 4.5pc, well above the national average. Yes, we welcome the fall, but these inflation figures are still dreadfully high. Beating inflation may seem all but impossible, but households need to do everything they can to minimise the effect of rising prices. Here are some ways to do so. Get the best savings rates As mentioned above, there are now some accounts that beat inflation for basic-rate taxpayers and those who still have an Isa allowance to use. If you can tie your money up for several years, you have the best possible chance of making sure that your money does not lose its value; but even if you fear that you may need it more urgently, it makes sense to have the best rate possible. If you are willing to tie up your money for five years, you can get the best rates. For a taxable bond, the best rate comes from BM Savings at 4.65pc, while if you still have your Isa allowance you can get 4.35pc with KRBS (formerly Kent Reliance Building Society). It is possible to get inflation-linked bonds from the Post Office paying RPI plus 0.5pc or RPI plus 0.25pc for five and three years respectively. However, Andrew Hagger of Moneynet calculated that if RPI was 3.4pc, you would end up with less money using an inflation-linked bond than a best-buy Isa or bond. For instant-access savings, you will not find a no-strings account that beats inflation. The best-value instant-access rate is Santander's 3.1pc. Nationwide offers 3.12pc before tax but allows only one penalty-free withdrawal a year. The best instant-access Isa comes from Nationwide, again at 3.1pc, but this is for its current account holders only. Elsewhere, Cheshire Building Society offers 3.06pc and AA Savings offers 3.05pc. Food and drink Despite the fall in the rate of inflation, the price of food and non-alcoholic drinks is still rising at a rate of 3.5pc year on year. The price of meat has seen the biggest hit - up by 5.7pc over the 12 months to January - and other food prices have risen too. There are ways you can cut the cost of shopping, however. Use the eattheseasons.co.uk website for ideas of what food is in season to help bring down the cost. Shopping at local markets, where these foods should be available in abundance, instead of supermarkets should help. Plan your shopping carefully. You can use tools such as the Mysupermarket.com website to compare the cost of food in different stores, and many people can save by shopping online and planning meals in advance, so that they aren't tempted by offers. Gas and electricity The cost of energy has been a particular problem in recent years, with prices rising by nearlt 19pc for gas and more than 13pc for electricity in the past 12 months. However, around half the country could still benefit to the tune of hundreds of pounds a year by switching from their current tariffs to something cheaper. Sites such as uswitch.com and Moneysupermarket.com should help you to do so. Which? has also launched a collective purchasing scheme for energy. For more information visit whichbigswitch.co.uk. The current rate of inflation as measured by the consumer price index