15th December 2022
How To Make Your Savings Work Harder During This Inflationary Period
Reevaluate your financial objectives – As you begin to observe the effects of rising costs, you may discover that it will take you longer to attain your existing financial objectives, or that they must be modified. So now may be a good moment to reconsider your plans and see if they need to be altered.
Have a Direct Debit cleanse – Many of us join up for memberships and subscriptions that we could certainly do without, so consider cancelling them or shopping around for a better price. You may be amazed by the amount of money you may save.
Prioritize your spending – It is worthwhile to investigate if you can delay planned purchases for a little longer. If it’s not important, you may want to hold off on making the purchase until you’re certain it won’t affect your level of life. However, if you’ve been considering making a large purchase, such as a car or a necessary home improvement, and you have the funds to do so, you may find that you’re better off making the purchase now rather than later, when prices may be even higher and the pound in your pocket will be worth less, thereby saving you money in the long run.
Try to pay off any outstanding debt – When inflation rises, interest rates are typically increased to help maintain economic stability. Consequently, if you have any variable-rate debt, your regular payments may increase. Therefore, it is advisable to assess loan arrangements as a top priority, ensuring that you are paying as little interest as feasible.
Maximize tax-advantaged savings and consider making investments – It is important to remember that you obtain tax savings on pension payments, effectively reducing the cost of increasing your pension plan contributions. Therefore, even if you’re now focused on short-term finances, it’s crucial to continue contributing to your pension: time in market is one of the most important aspects in investing, and if you decide to stop contributing, you could miss out on substantial contributions from your company. However, keep in mind that you cannot access your pension savings until age 55. (rising to 57 in 2028 unless you already have a plan with a protected pension age).
If you want to access your money before age 55, while giving your savings a chance to grow in accordance with inflation (and, more crucially, a chance to beat it), you should invest for a period of at least five years. Stocks and Shares Individual Savings Accounts are a tax-efficient way to save for medium- to long-term goals without tying up your funds.
Or, you may choose a Cash ISA for shorter-term purposes, like as emergency savings; however, you must consider the impact of inflation on the value of these investments.
Please contact us for more information on how we can help protect your future financial well-being and the options available to you.
Source data:  According to Pensioner Income Series Data –https://www.gov.uk/government/statistics/pensioners-incomes-series-financial-year-2020-to-2021/
 Figure is based on Standard Life internal analysis of market annuity rates as at July 2022
A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS PLAN HAS A PROTECTED PENSION AGE). THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP WHICH WOULD HAVE AN IMPACT ON THE
LEVEL OF PENSION BENEFITS AVAILABLE. YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.