Monday, November 28, 2022

How to combat the impact of rising inflation on your savings, retirement and grocery businesses

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Inflation will have a major impact on your savings, groceries and retirement – I’ll tell you how to fight it.

As the cost of food and services has soared, inflation has entered double digits for the second time this year.

Official figures from the Office for National Statistics (ONS) show that inflation hit 10.1 percent in September, up from 9.9 percent in August.

That means prices are rising across the board, which means your money won’t go quite as far as it did before.

So how can you forestall the effects of inflation? Under, I runs some of the ways you can make the most of your money.


With inflation at 10.1 percent, that means the purchasing power of your money is many times less. If you keep most of your money in cash, the value of that cash will erode very quickly while inflation is so high. If interest

The interest rates offered on many savings accounts and bonds are rising steadily – thanks to the Bank of England’s rate hikes – but not enough to keep up with inflation.

The best readily accessible savings accounts offer a 2.55 percent return, according to Moneyfacts, while fixed-rate accounts pay 4.75 percent for a one-year term, 5 percent for a two-year term, or 5.1 percent for a five-year term.

To beat inflation, you need to take on more risk — or be willing to tie up your money for longer. Stocks and equities give you the best chance of beating that 10.1 percent mark and are the best performing investments over the long term.

By making monthly contributions, you can develop a good investing habit that can help grow your wealth over the long term while smoothing out daily stock market fluctuations. Consider setting aside a small amount to invest in a stocks and shares ISA, or investing in a tracker fund through an app like Etoro or AJ Bell’s Youinvest to get started.

It’s worth remembering some wise advice from Myron Jobson, senior personal finance analyst at Interactive Investor: “Time in the market, not timing of the market, is an integral part of long-term wealth creation.”


For those who haven’t retired yet, investing in an annuity is one of the best ways to insure your retirement against the looming inflation. The freeze on the income tax credit and other personal allowances means that paying into a company pension plan – if you have one – is often more financially beneficial than investing the same money in other savings.

One of the best ways to ensure you feel more comfortable in retirement is to make sure your money is working for you and isn’t just sitting in a savings account that’s declining in value.

Although we all need some money in reserve for day-to-day expenses and emergencies, any excess could hurt your financial plans. Investing that money in investments, real estate, or even just a fixed-rate savings account can help reduce the effects of inflation.

It’s also a good idea to consider where your pension will be invested. Most people will tend to move their investments into less risky areas as they get older, but your pot needs a good mix of different products to survive a 30-year retirement.

You might also consider buying an annuity to guarantee you a stable income, especially since interest rates have risen significantly in recent months. You can also get inflation-linked pensions to really counteract that impact. You also pay more the older you are and if you have an ongoing medical condition.

However, once you have bought an annuity, you cannot remove your money from it. So be sure to plan for this. One solution is to annuity some of your retirement pot for reliable income, while investing the rest in traditional investments for a better — albeit riskier — return.

A final – albeit extreme – option might be to delay your retirement, especially if you have other sources of income besides your pension.

“Salaries tend to rise in line with inflation, so you have the ability to continue contributing to your pension, take advantage of the tax breaks that are available, and invest them to outperform inflation depending on your time horizon,” explains Rosie Hooper, Chartered Financial Planner at Quilter.

to eat and drink

Grocery costs rose 14.6 percent in the year to September 2022, and shoppers have been seeing the difference at the checkout for months.

Buying the same brands will cost more today than they did a year ago, so consider switching what you’re buying if possible. Keeping track of your spending habits and budgeting properly is a good start, but looking for cheaper recipes can also help. Some supermarkets offer a remedy, such as Tesco with their ‘5 Easy Family Meals for £25’ or Lidl’s ‘5 Family Meals for £20’ recipes.

There’s a growing community of budget bloggers on social media who can offer even more tips and advice, as well as meal plans on a budget. These include Jack Monroe aka Cooking on a Bootstrap (Instagram), Sarah on Taming Twins (Instagram) and Feed Your Family (Instagram).

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