Thanks to the corrosive effects of inflation on cash savings the ‘fiver’ has declined by 96% in the past sixty years, the bank’s Private Banking arm said in research coinciding with the paper £5 being withdrawn from circulation.
Lloyds said that on the other hand £5 invested in the UK stockmarket in 1957 would today be worth £427 – a rise of 8,443%.
The fall in the value of money is plain to see in the price rises of basic stables such as a loaf of white sliced bread, which has risen by 2,061% in 60 years, while beer has gone up more than 6,000%.
The average erosion in the purchasing power of money in the past 60 years has been 5.3% a year, the bank said, including the period of 1967 – 1977 when prices rose 11.3%.
The lowest inflation came in 2007 – 2017 when it rose by just 2.7% annually.
Sarah Deaves, private banking director at Lloyds Private Banking, said: “It is interesting to note that despite the ups and downs in the stock market, UK shares have outpaced cash over this period.
“If people had invested in 1957 their investment would have outstripped inflation many times over, which suggests that taking a longer-term view of investing can pay dividends.”
