Is your money keeping up with inflation? Here we discuss what options are available to make the most out of your savings.
You can’t avoid hearing all the stories of rising inflation and the cost of living. This makes it even more important to make sure your savings are in the most appropriate place for you. 
You might be considering investing to potentially grow your money, or prefer to keep it somewhere easily accessible and low-risk due to increasing expenses.
Vitally, if you choose the latter, it’s important to try to prevent your savings from losing value over time due to inflation, for example, by sitting in a current account.
Before you start saving
The best way to start saving is to start tracking your spending. Once you have some money set aside you can think about what to do with it. It can be difficult to start saving as you need to thoroughly understand your overall finances and you may need help to plan an effective savings strategy and establish what options are best for you and your future.
Do you have any debt?
The interest on debts can be greater than any gains you make in savings. Subsequently, it could be more beneficial to pay off any debts before building your savings. Paying off any high interest debt should be your first priority.
Do you have an emergency fund?
It’s important to put some money aside for a rainy day. Unforeseen circumstances such as losing your job or a serious illness or injury can significantly impact your income and outgoings. It’s wise to keep this money separated from debt payments or saving/investment plans; only use it when you really have to.
Do you want to save or invest?
This is an important consideration. Some options are safer and you will get back the money you put in, plus interest. Whereas other options that involve investing require some risk of losing the money you put in with a chance of it growing quicker.
Should I invest my savings?
Once you have built up some savings, you can either keep them as that or choose to invest some or all of that money. With investment, there is an element of risk as you are not guaranteed to get back all the money you put in. However, your investments could grow and therefore are more likely to keep up with inflation and not lose value, or provide you with a source of income. As with all investment funds, how, where and when you invest monies is important. As is linking this with your attitude to risk, your tax position and your goals and requirements. Savings and investments can be used to compliment retirement planning, assist children, or may be part of a lifestyle plan. They can be used with an ultimate goal or requirement in mind or simply as financial security. Whatever your plan maybe, it is important that financial advice is considered.
Where can I invest my savings?
Types of asset classes can behave and perform differently. It is wise to build a diversified portfolio of investments to protect your assets as it is less likely all classes will perform poorly at the same time.
- Shares/Equities: You own a small fraction of a company and therefore if it’s value goes up and down so does the money you put in.
- Bonds: Money that is loaned to the government or companies. You earn a fixed level of interest that increases in line with the risk you take. Property: Either directly into a property or via a development company and can be commercial or residential.
- Commodities: This includes things such as oil, gas, precious metals such as gold and silver, industrial metals such as copper and iron, agricultural commodities such as rice and wheat. Prices fluctuate depending on demand and funds can take advantage of this.
- Cash: This is a safety net and a good benchmark for other investments.
For further information contact Whitechurch on: wfc@whitechurch.co.uk, call 0117 452 1208 or visit www.whitechurch.co.uk
The above is approved by Whitechurch Securities Limited, which is authorised and regulated by the Financial Conduct Authority. The contents may not be suitable for everyone and Whitechurch Securities Limited recommends taking professional advice before entering into any obligations or transactions.
