In February and March UK inflation reached 2.3% – its highest level since September 2013, according to figures from the Office for National Statistics.
Last November, the National Institute of Economic and Social Research thinktank predicted inflation could soar to 4% during the second half of 2017.
YouGov surveyed more than 4,000 UK adults online in February and warned that millions of people would see their savings shrink if they did not know how to achieve sufficient growth to outpace inflation.
Coming some distance behind the 37% who were ‘don’t-know’s, 27% of those surveyed picked investing in property as the best way to beat inflation, followed by a cash ISA (13%) a stocks and shares ISAs (7%), bank and building society accounts (6%), the stock market (4%) and pension savings (3%).
If we don’t protect our savings from inflation, we will see our wealth simply drain away.
The survey found that almost twice as many people thought a cash ISA would offer better protection against inflation than a stocks and shares ISA, which is of course nonsense and, with the rise in the ISA allowance to £20,000 this tax year, this could leave still more savings at risk of being eroded by inflation, if left in cash.
Where appropriate, Magenta will recommend a balanced portfolio to combat inflation, which will take account of a person’s objectives, attitude to risk, required investment return and capacity for loss. Contact us to talk about this some more.