Over longer periods of time (five years or more), investments such as stocks, shares and funds have the potential to give you higher returns compared to cash savings. But the value of investments can fall as well as rise. There is a chance you may get back less than you put in. Eligibility criteria, fees and charges apply. Past performance is not an indicator of future performance and should not be relied on as such.
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How it affects you?
According to the Bank of England’s inflation calculator, something that cost £10 in 2018 would now cost £12.67 in 2024.
This means you’d need an average return of better than inflation on your money to ensure it’s keeping up with rising prices.
Although the Bank of England’s base interest rate has increased and this influences savings account interest rates, that’s hard to achieve.
Inflation calculator
See how rising prices could be holding your cash back and what you could do about it.
The importance of savings accounts
Let’s be very clear though. There is very much an important place for your savings account in your financial set-up.
Such accounts are secure and grant you instant access to your money. You should put enough cash into one to cover any emergencies.
But with that emergency fund in place, you could consider other ways to grow any extra money you have for your future, like investing.
Learn more about investments
Whether you’re an experienced investor or just finding out what investing is, we’ve got a range of articles to help you understand more about investing.
We regularly update our articles depending on what’s happening in the market so check back for future updates.