Everything is getting more expensive from petrol to pasta to wine. The cost of living is currently reported to be at 7% but this is very much dependent on your own basket of goods. It is forecast that inflation will increase to 10% by the end of the year.
Interest rates on easy access accounts at the most are set at 1%, clearly not too attractive when inflation is rising.
Investments, be that loans to governments or big corporations (fixed interest) and many shares have had a tough time since the tail end of 2021. Investments having been affected by interest rate rises, inflation, supply chain blockages and the conflict in Ukraine.
So, what is the answer for using any surplus funds that are available once you have considered essential, lifestyle and discretionary expenditure, put aside a suitable contingency fund and earmarked any one-off purchases?
If you can steel yourself for your money to move both up and down over time, then looking to invest a portion of your funds could result in a better longer-term outcome. Usually considering an investment time horizon in excess of seven years is a realistic period to have the potential to deliver a return in excess of cash and inflation. If you can take advantage of tax breaks from the government when investing, for example income tax relievable contributions, tax free income or capital when exiting an investment then so much the better.
At Wingate, we help clients identify their needs and objectives setting aside adequate savings and funds for short, medium-and long-term goals. This allows us to formulate a personalised plan giving our clients confidence that any market dip in performance is unlikely to have an impact upon their immediate standard of living.
If you would like to discuss your financial circumstance, look to build a personalised financial plan, and ensure that you are taking advantage of tax breaks and allowances with your assets please contact one of the financial planners at Wingate.
Note: Past performance is not a guide to future returns and investment will move both down and up over time. You may get back less than you paid into the investment.