Tips for beating inflation and increasing your savings

Here’s how to stay one step ahead of the nation’s inflation.

09:10 23 October 2013

Inflation has drastically changed the way UK households live. It was reported by the Bank of England recently that the inflation rate has dropped but the target of 2% wasn’t reached.

 

A year ago, life was a bit easier to manage. However, if UK households are to maintain their standard of living they had, then approximately £18 billion pounds have to be pumped into the current expenditure.

Taking The Bull By The Horns

The inflation in the UK at present stands at 2.8% and now it is easy to find savings that beat it.

 

It is expected that the rate will continue to stay up there, and with the rate not likely to change, the existing saving accounts are unlikely to change anytime soon.

Using ISAs

ISAs are great way of getting returns. However, if you are going to beat inflation, you should find one that pays over 2.8 per cent.

If you are still not convinced about ISAs, then this point will definitely get you thinking. These investments allow people to transfer cash into them. Hence, you can move money when the rates sky rocket.

One point of caution, however, the highest rates require consistency in payment and don’t allow for frequent transfers.

Saving Accounts: To Go Regular Or Not To Go Regular?

For you to beat inflation, you should make a habit to save something at the end of the month. It’s not always easy to pull this off. Even having access to the account can be a challenge.

 

If you want to go this route, you should read the terms and conditions as sometimes it might even take you some years to get access to the money.

Children’s Account

These accounts have the highest interest rates so if you have a child that’s qualified then seize the advantage. In the end, it is just worth it.

You may even want to find other ways to earn extra money and counteract inflation costs. However you need to think about certain things such as balancing your work / family commitments and your health – it’s not worth working yourself into the ground for a small reward.