THE £10 note featuring Charles Darwin will cease to be legal tender from tomorrow, but its value has been eroding for years. Thanks to inflation it is worth a third less than when originally printed almost 18 years ago in November 2000.
If left in a piggy bank the tenner’s spending power would be just £6.17 in today’s money, according to new research from fund manager M&G.
Those who saved it in the average deposit account would have £11.78, but that is worth just £7.27 in real terms.
M&G investment director Ritu Vohora said: “With prices rising at 3 per cent a year, the value of the new Jane Austen £10 note is eroding even faster.”
Stock markets offer greater protection against inflation, with the FTSE All-Share turning a tenner into £24.31 since 2000, or £14.90 in real terms.
Government bonds gave a marginally better return, while residential property was the most rewarding, thanks to rising house prices, with every tenner invested growing to £25.79 today or £15.92 in real terms.
If you had invested £10 every month in the FTSE All Share since November 2000 you would now have £4,278, against just £2,173 in a typical cash savings account.
Maike Currie, investment director at Fidelity International, said with wages rising at 2.5 per cent a year, inflation is also eroding the real value of incomes.
“As long as inflation outpaces earnings growth, UK consumers are getting progressively poorer every month.”