What is the best method of protecting cash savings from inflation?

suzieagogo

Not sure if this is the right section to post this, but what is the best way to protect cash savings from inflation?

ses6jwg

index linked gilts or index linked savings certs from NS&I

Aegis

NS&I Index-linked savings certificates sound like they might a good solution for you.

Mr.Mulla

In order keep up with the rising inflation and protect your savings, you must earn enough interest on your cash savings so that, after tax, it is at least equal to inflation. If you are a basic-rate taxpayer, you need to find a savings account that would offer high interest to earn enough to protect your cash savings.

gozomark

What are you trying to protect your capital against ? General inflation or specific price inflation on something like property ?

artha

Aegis wrote: »

NS&I Index-linked savings certificates sound like they might a good solution for you.

Doesn't it also depend on your individual situation as to whether index linking and the index used is appropriate?

As a new pensioner with no mortgage I can see real prices for me rising (CPI) but my pension is linked to RPI and have just been informed that there will be no increase this year. As I understand it the NS&I index is RPI

RayWolfe

NS&I does use RPI. Yesterday RPI was announced for December at 2.4%

ses6jwg

BoE says it expects RPI to to climb to and remain above 3% in the short term (In investment terms up to 2 years).

IL bonds currently giving RPI + 1% tax free and can be cashed in with interest after 1 year.

G_M

suzieagogo wrote: »

Not sure if this is the right section to post this, but what is the best way to protect cash savings from inflation?

The simple answer is 'to earn the maximum net rate of interest possible'.

However, specific advice is impossible without a lot more information about your circumstances, your aims/aspirations, and your attitude to risk.