Inflation (or the rise in the cost of living) has made the headlines recently, after a long absence.
For example, the US inflation rate for the last 12 months stands at 5% and in China it is as high as 9% (to the year ending in May 2021).
Most central banks anticipate this being a temporary trend, but if not, it will inevitably have an impact on stock markets and investments.
Another implication of increasing inflation, which is perhaps closer to home, is the potential impact it might have on savings, particularly when you take into account the miserly interest rates applied to savings accounts these days.
This is something that most people don’t really think about but more than ever it is important to make sure that your hard-earned savings are working as productively as possible, to preserve its purchasing power over time.
This doesn’t necessarily mean you have to invest. That is one of a number of potential solutions to the problem, but perhaps this is something you might want to discuss with us at your next review meeting.
Or, if you’re not already a client, just give us a call!