When inflation's higher than the interest your savings are earning, you might hear that it's just "not worth saving". When your savings are worth less every month in real terms (i.e. once you've taken the rising cost of living into account), some people would say you might as well spend it now!

You're reading this now because we've just heard that CPI inflation stood at 2.7% in December - unchanged for three months running.

And Moneyfacts.co.uk has just published some (pretty depressing) figures. To beat inflation:

• A basic-rate taxpayer would need to get 3.37% interest on their savings per year

• A higher-rate taxpayer would need to get 4.5% interest on their savings per year

• The average no-notice account pays just 0.88% interest at the moment.

With 844 standard savings/ISA accounts available today, it says, only three ISAs actually negate the impact of tax & inflation, whatever your tax position.

'Worth less' doesn't mean worthless!

OK, it's not pleasant to think of your hard-earned cash devaluing while it sits in an account, but this is no reason to give up on saving. Consider these points:

1) It's rainy-day protection

One of the main reasons people save is so they have something to fall back on if they run into tough times - a 'rainy-day' fund. Even if the money you've saved up isn't worth as much as you'd hoped, it could still be immensely helpful. It might mean, for example, that you don't have to borrow any money to see you through.

Debt tends to come with much higher interest rates than savings, so you could end up losing a lot of money to interest if you were forced to borrow - while you were looking for a new job, for example.

And that's not the only issue. You're more likely to find it hard to get credit when you're struggling financially. And even if a lender's willing to lend you some money, it might not be a good idea: you might have to pay a higher rate of interest on it, and you'll have to think very carefully about whether you'll really be able to repay it as arranged.

2) It can be a great way to pay for high-cost items

Preparing for a rainy day isn't the only reason to save up. You might be saving up for a holiday, a new car, home improvements….

Again, remember that the interest on debt can be a lot higher than the interest on savings. Even if your money's lost a bit of its value while you're saving up, you could still save yourself a lot in the long run by not having to borrow.

An example: say you borrowed £3,000 at 17% and arranged to repay it over three years, you'd pay around £850 in interest over that time, as a quick play with an online loans calculator will demonstrate.

3) Inflation figures measure the past, not the future

When you see inflation figures, they tell you how much prices have gone up over the past 12 months: they don't tell you what to expect over the next 12.

So you might want to see what economists are predicting. You could check out the figures on PwC's site, for example, which show that while inflation stood at 4.5% in 2011, it's expected to be 2.5% this year - and should fall to 2% by 2015-19.

Depending on how much faith you place in forecasts and predictions, you might see this as encouraging news - especially if you also reckon we'll see more impressive interest rates on savings accounts in future.

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