How To Protect Your Money During Inflation
How To Protect Your Money During Inflation

Monday 23 May 2022

There is no denying that the cost of living has increased significantly in the last few weeks, and this has brought on a fear of inflation. These fears are not irrational, but inflation is not necessarily as scary as some may think. There are a number of things you can do to protect your money during inflation, but one you should never do is leave it in the bank.

Assets that have proven to fare best under inflation are those assured of bringing in more cash or rising in value as inflation increases such as a rental property subject to periodic increases in rent.

HSBC advises that money held in savings accounts hasn’t grown much in recent years due to historically low interest rates. But with inflation running high, savings are now at risk of losing value in ‘real’ terms as you will be able to buy less with your money.

An example HSBC has provided: “Let’s say inflation averages 3% over the next 5 years. That means what costs you £1,000 today would cost you £1,159.27 in 2026. If you put £1,000 in a savings account today paying 0.5% interest, you will only earn £25.25 interest over the same period. So, you would effectively lose £134.02.”

So, what can you do to protect your money?

You could wait for interest rates to rise but for people wanting to save, the benefits of any interest rate rises will probably be marginal. This is due to rate rises likely to be slow and steady, starting from historic lows.
Alternatively, investing your money over the medium to long term may give you a better chance of beating inflation and possibly profiting from it. That is because investments could give your money greater potential to increase in value over time.

Any investment can fall in value as well as rise, so you need to be prepared for the value of your investment to jump around, but the longer you stay invested the more potential your money has to grow – as well as recover from any setbacks along the way.

Real estate is a popular choice because it becomes a more useful and popular store of value amid inflation while generating rental income.

Robert Medd, Co-founder of ERE Property commented: “Prices in residential property have been robust throughout COVID, rentals especially have been increasing following the pandemic, now is the time and opportunity to invest in buy-to-let as less people may buy-to-live and look to rent.”

If you would like more information on property investment, get in touch on 0113 380 8930 or email us at

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