Long Term Saving & Inflation

For long-term savers, keeping your money growing ahead of inflation should always be a priority.

Over the long term, inflation tends to be 2% per annum, whereas the average deposit rate is 0.012%.

So, over 10 years, the cost of goods and services has increased by 20% and your money has grown by 0.1% or 0.2% before tax.

Some of your regular saving money has to build up an emergency fund, anything that needs to be spent in the next 5 years needs to be kept aside on deposit for accessibility and security and anything further than that can be invested for long-term growth.

Now, investment means a multi-direct debit going to a life and pensions company, an investment company or a direct debit set-up.

It goes to the company and a policy in your name and it gets invested, so there is some risk in a regulated, well-diversified fund.

Fluctuation should be temporary, so that's why if you give it a long-term time frame, those fluctuations will resolve themself and you'll get long-term growth.

So instead of 1.2% over 10 years, you can be looking at 5& or 6% per annum, so that's a 50 to 60% potential growth.

Therefore it's worth looking at for long-term investors, who are willing to take some risk with some of their money.

If you have any queries or need to understand your long term saving options feel free to get in touch to start a conversation??