Our latest guide explains why inflation may alter your long-term plans and what steps you could take to reduce the impact.
In the 12 months to April 2023, the rate of inflation was 8.7%, according to the Office for National Statistics data. In fact, for much of the last year, the Consumer Prices Index (CPI) has been in double digits and far higher than the Bank of England’s 2% target.
The high levels of inflation have been linked to the Covid-19 pandemic and lockdown, as well as the war in Ukraine. Both of these global events affected business operations and the cost of goods and services.
The upshot is that, from your utility bills to trips out, you may be spending more than you were a year ago. High inflation means your outgoings have probably increased just to maintain your lifestyle.
Inflation can also affect the value of some of your assets in real terms, especially cash. If the value of assets doesn’t rise in line with inflation, their spending power shrinks. Over time, what you can buy with the assets will gradually fall. So, while the numerical value may remain the same, in real terms, your wealth is declining.
While you can’t stop inflation, there may be things you can do to lessen the effect it has on your wealth.
Our latest guide below highlights five things you could do to “beat” inflation. Please click on the link below to read or download it.
If you’re worried about how high inflation could affect your long-term wealth, please contact us. We’ll work with you to create a financial plan that reflects your circumstances and priorities.