Households’ expectations for finances turn positive for first time in five years

Savers and cash hoarders are being warned to consider the eroding impact of inflation as the Bank of England's new £50 note entered circulation today. 

After being withdrawn in 1945, the £50 was reintroduced into circulation in 1981 - at that point it had the purchasing power of around £217 at today's prices. 

The new £50 polymer banknote, which features mathematician and code-breaker Alan Turing will become the final bank note to switch from paper to plastic. 

There are currently 330million £50 notes in circulation – with a combined value of £16.5billion. 

Britons should take heed of history, according to Hargreaves Lansdown, and think carefully about how best to protect the purchasing power of a £50 note in the future.

If you'd left it under the mattress back in 1981, a £50 note would have lost £38.46 of its buying power, the investing platform says.

If you'd saved the £50 at launch and it grew at two per cent a year it could be worth around £110 today.

As for those who invested the £50 at its relaunch, they are likely to have made a much healthier return.

If you'd invested the £50 in 1981 in the FT 30 index and FTSE 100 index from 1984 it could be worth just over £2,300, as of today according to Hargreaves Lansdown, although this doesn't factor in any fees or ongoing charges. 

'£50 isn't what it used to be,' said Sarah Coles, personal finance analyst at Hargreaves Lansdown.

'If you had a modern £50 note when it was first issued in March 1981, and kept it under the mattress ever since, it would have lost more than three quarters of its buying power.

'However, if you'd put it to work it could have grown to around £2,300.

'By contrast if you'd put the £50 into a savings account paying an average of 2 per cent over this period, it would have delivered just £110.

'It demonstrates that while holding emergency cash in savings is invaluable, keeping too much in cash over the long term means you risk losing spending power after inflation.

The rate of inflation rose to 2.1 per cent last month on the back of a surge in fuel prices, food, drink and clothing.

If inflation were to rise by 2.1 per cent over the next 10 years the actual value of a new £50 note will fall nearly a quarter, meaning in ten years your £50 will be worth the equivalent of £38.45 in terms of purchasing power.

Would you save £50?

There is currently not one savings account that can outpace the eroding power of inflation with many commentators predicting that worse is still to come.

The biggest banks are paying less than 0.1 per cent interest on average across their range of easy access accounts, with savers typically earning between 0.02 per cent to 0.06 per cent interest over a full year, according got Moneyfacts.

Consumer champion Martin Lewis says there is not enough sympathy for fraud victims, and is calling for a police crackdown on the ‘almost unpunished crime’.

The Money Saving Expert founder warns that those who fall prey to scammers are seen as ‘lesser victims’ because people wrongly assume that they have the money to spare. He adds that fraud should be seen as an ‘epidemic’ which is accelerating at an alarming pace.

His comments come after the Mail revealed fraudsters have stolen £2.6 billion from unwitting victims since May last year — up some £350 million on the previous year.

Investigators warn there has been an explosion in ‘mass impersonation’ scams during the pandemic, with fraudsters posing as officials from the NHS, HMRC or Royal Mail.

And while nearly 150,000 victims have authorised payments totalling £479 million through their banks to fake officials, only £206.9 million has been reimbursed.

Mr Lewis told Money Mail: ‘The problem is that fraud is almost an unpunished crime and people can get away with it with impunity. 

The number of prosecutions for fraud is negligible compared to the number of occurrences out there.

‘Even in high-profile cases, there is nothing that can be done. We do not prosecute or take any resources back from fraudsters.

‘There will be enormous numbers of people out there who have reported cases of fraud to the police and have just been told they’re not worth investigating.’

He adds that the true number of scams could be even bigger because most people are too embarrassed to report fraud.

Mr Lewis says scam victims should be treated much better: ‘People somehow think of victims of fraud as lesser victims because, well, it’s only money, isn’t it?

‘If you have the money to give away, then you have the money to spare. That’s balderdash. Fraud can destroy people’s financial lives, but it’s also devastating for people’s mental health, their self-esteem, and their levels of anxiety and depression.

‘It should never be considered as a simple victimless crime.’

Last week, Money Mail revealed how elderly victims are being targeted disproportionately by scammers. 

Victims over the age of 70 have lost a total of £425.3 million to scammers since May last year, according to figures from Action Fraud.

Experts warn that vulnerable adults, such as those with dementia, are most at risk because they are unlikely to realise they have been scammed, let alone report it.

National Trading Standards (NTS) says the over-70s are also more likely to be preyed on by nuisance callers.

Those who respond to scam calls and mail are then typically put onto ‘sucker lists’ which are traded between fraudsters. This leads to the same person being repeatedly targeted.

According to NTS, the average age of somebody on this type of list is 73.

The National Crime Agency believes a ‘controlling mind’ kingpin based in the UK is steering an international gang responsible for much of the fraud.

The Government is under increasing pressure to pour more resources into the police to tackle the scammer epidemic.

Until now the pressure has been placed on cybercrime reporting body Action Fraud — which Mr Lewis labels a ‘flaccid organisation that does nothing’.

He is calling for a ‘joined-up’ approach, with an anti-fraud taskforce which regulates and governs telecoms providers as well as banks.

He says: ‘We all now understand the R number. Well, I think the scam R number is about three or four at the moment — it just continues to explode.

‘It does not take [deputy chief medical officer] Jonathan Van-Tam to realise that people are being mass-defrauded across the United Kingdom.

‘Police action is flaccid because it’s so under-resourced. Fraud needs to be stamped out. Clearly we’re going to see more, not less, in the future.

‘First, we need to deny scammers access to the public, which you could do more effectively through the draft Online Safety Bill’. This aims to deliver on the Government’s manifesto commitment to make the UK the safest place in the world to be online.

‘And we need to increase the resources available to the police so there is a zero-tolerance attitude to fraudsters,’ Mr Lewis adds. ‘They have to know they are going to be investigated and the money that they stole will be taken back off them.’

Last week, Home Office minister Baroness Williams of Trafford told the Mail that the Government is recruiting specialist fraud officers to investigate scammers.

A spokesman for Action Fraud says: ‘We recognise the threat from fraud is increasing and are actively working with police forces to improve the policing response.’