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Inflation begins to bite

With inflation rising in recent months, hitting its highest level in more three years at 2.3% in February and remaining flat at 2.3% in March, this means that in real terms, taking into account low wages growth and little to no growth on savings held in banks and building societies, people are worse off month after month than they have been for many years.

We are all aware that interest rates offered to savers have been low to zero in the UK as well as across Europe for years now, but that didn’t matter as much all the while inflation was at zero or negative percent, but this is now a worry as the effect of inflation means that the buying power of the cash people have is steadily decreasing.

Arguably, many savers with decent pots should invest some of their money over and above a rainy day (contingency) fund, and savers are missing out on the potential for better returns by not doing so, however, they are also avoiding the chance of losing money if markets fall. But the savvy savers are realising that nowadays they have to accept some risk if they are going protect their money against growing inflation that will diminish the real value of their savings.

Be smart with your money – if you would like advice on what’s on offer, Blacktower and myself are here to help you.

 

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Misconceptions about Pensions

Pensions might not be the most exciting or glamorous aspect of the financial world, but their importance cannot be overstated. Planning ahead and ensuring you have sufficient pension funds for retirement will not only provide peace of mind in the run up to retirement, but also ensure that you are able to live comfortably and […]

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Are better Interest rates on their way at last?

Graphs and arrowsThe UK has had an unprecedented period of low interest rates;  2009 saw the base rate drop to 0.5 and then last August down to 0.25.  That’s eight years of extremely low interest rates.  Whilst this has been great for borrowers and helps to keep the business economy afloat, it has been disastrous for those people in or approaching retirement.  Annuity rates have been terrible for pension income returns and the bank rates for the people who have savings have been providing very poor returns.

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