“The true impact of inflation on cash savings and pensions”

Leaving your money in the bank or building society has always meant that its ‘real value’ after inflation will go down. Although rates go up to, supposedly, control inflation, any chart you look at will show that, apart from a few very short-term blips (N Lamont, I’m looking at you) they are never more than inflation. So we always say, often until we’re blue or some other shade in the face, that you should leave funds you will or might need in the next couple of years, plus a good rainy-day reserve, on deposit. The rest will always do better if you invest. For most of this year, that’s been a tough call, however blue our cheeks become; why wouldn’t you prefer 4% or more from an easy access account to nothing much at all from your supposedly balanced investment fund. Well, because it will turn around, quite likely sooner rather than later. A great saying I heard last week: history doesn’t always repeat itself, but it does very often rhyme.

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