According to the latest Aviva Family Finances Report, while families have seen annual inflation increase dramatically on essentials such as food (+6.4%) and fuel and lighting (+7.45%), their actual monthly income fell by 2% from £2,062 in May this year to £2,018 in August.

The typical UK family currently has just £982 in savings, down 16% from £1,163 in May. However, the good news is that the typical amount saved each month is now £34, which is up slightly from £32 in May.

At a time when every penny counts, here, we look at some of the ways you can ensure your money is working as hard as possible for you, even if you are only able to save a few pounds a month.

Don’t pay tax unnecessarily

Make sure you use your tax-free allowances every year, or you might end up handing over money to the taxman that you could keep yourself.You can invest up to £5,340 in a cash individual savings account (ISA) this year, and returns are tax free.

If you have invested in cash ISAs in previous years, check the rates on these accounts and if they are no longer competitive, move your money to an account offering higher returns as soon as possible.

Current best buy ISAs include Northern Rock’s online eISA paying 3.05% which is available exclusively via MoneySupermarket. You can open the account with a minimum investment of £1 and you can also transfer money in from existing ISAs.

Other competitive ISAs include ING Direct’s recently-launched cash ISA paying 3.00%. As an added bonus, ING is offering every MoneySupermarket customer a £10 cash gift when they open an account. No transfers in are accepted.

West Bromwich Building Society’s WeBSave ISA 2, which pays 2.85% annual interest tax-free on a minimum investment of £1,000, is also worth a look, and, if you want to lock into a fixed rate account, Northern Rock’s Fixed Rate e-ISA Issue 19  pays 3.20% for a year if you have £500 to invest.

The rate on the West Bromwich account includes a 1.16% bonus which is only payable until the end of July next year, so you may want to move your money then.

Easy access needn’t mean low returns

It’s always important to keep some of your savings readily to hand in the event of an emergency, but opting for an easy access account needn’t mean sacrificing high returns. Several easy access accounts currently pay interest more than six times higher than the Bank of England base rate.

For example, West Bromwich Building Society has just launched a WeBSave Easy Access 3 account  paying a whopping 3.17% annual interest before tax on a minimum investment of £1,000.

This rate includes a 1.42% bonus for the first year, so you may want to move your money then. You can make four penalty-free withdrawals from this account each year.

Other options include Northern Rock’s Online Reward account which pays 3.11% annual interest on a minimum investment of £5,000. This rate includes a 1.61% bonus for the first 12 months, and you can make up to six penalty-free withdrawals a year.

If you don’t have such a high balance to invest, then Santander's eSaver Issue 4 account pays an impressive 3.10% annual interest before tax on a minimum investment of £1, but this rate does include a hefty bonus of 2.60% which is only payable for the first year, so you will need to move your money when the bonus disappears

Similarly, ING Direct's Savings Account also pays 3.10% annual interest, again on a minimum investment of £1, and this rate includes a bonus of 2.56% for the first year.

Another option worth thinking about is Leeds Building Society's Online Access account Issue 5, which pays 3.05% on a minimum investment of £100.

This rate guarantees to match the Bank of England base rate plus another 2.55%, but only until the end of August next year, so again you will need to move your money when this bonus disappears.

Lock into a fix for the best returns

If you have any savings you can afford to leave untouched for a year or more, then locking into a fixed rate account will provide you with higher returns.

Vanquis Bank’s one year fixed rate bond for example, pays a hefty 3.45% annual interest before tax on a minimum investment of £1,000, or you can earn 3.40% with Tesco’s one year Fixed Rate Saver account which can be opened with a minimum investment of £2,000.

If you can’t afford to put away that much, then you can still earn high rates of interest - Northern Rock’s Fixed Rate Bond Issue 439 is currently paying 3.25% on a minimum investment of £1.

The longer you can tie up your savings for, the higher the rates of interest you can earn, but bear in mind that these rates may not look quite as competitive as they do now once interest rates start to rise.

Cahoot’s two year fixed rate bond issue 3, for example, pays 4.01%, but you do need a steep £25,000 to qualify.

Other accounts worth looking at include the Post Office’s two year online bond paying 3.96% on a minimum investment of £500, or the AA’s Internet five year fixed rate savings account paying 4.60% on a minimum investment of £1.

Commit to regular savings

If you’re finding it tricky to get into the habit of saving every month, then a regular savings account could be your best bet.

You can open many of these accounts with as little as £10 or £20 a month and if you set up a standing order or direct debit every month, it’s a great way to ensure you are putting something aside regularly.

For example, West Bromwich Building Society’s Regular Saver Adult account pays 4.10% if you deposit £10 a month, and you can miss up to two calendar payments a year.

If you have a HSBC Premier, HSBC Advance, HSBC Graduate (Advance) and HSBC Passport account you can earn a massive 8% with HSBC’s Regular Saver account, into which you can pay 325 up to £250 a month.

HSBC Bank Account, Bank Account Pay Monthly and Graduate Bank Account customers earn a lower rate of 4%. Bear in mind you cannot make withdrawals from most regular savings accounts so you must be able to leave your money untouched for the year.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.