Help protect my savings from inflation

Laikos

Hi everyone,

I'm new here and not particularly financially savvy, so please bear with me! And apols in advance if the answer to this is just I should get a financial adviser (if so I'd welcome views on which one, what they cost etc.). I've just inherited some money (5 figures) and don't want to see it's value disappear due to the inflation we're dealing with. Even locking it up in a savings account for a considerable time appears to involve a real terms loss. I already have a help to buy ISA, but realistically I'm never going to buy anything in London (where I'm likely stuck for the next 3 years say). Finally, I have some other savings denominated in euros that I'm trying to buy a property abroad with (and hopefully move into in say 3-5 years time). My risk appetite is on the low side, I'm mostly concerned about not losing the real value of my savings though obv. some growth would be nice (I'm not looking for any income so would reinvest anything earned). Ofc the world seems to have gone a bit mad atm so I'm thinking the best thing would be to drip feed in the remainder of my yearly allowance into a stocks and shares isa at the end of this year and the beginning of the next, and put the rest of it 'somewhere else' - probably the highest earning savings account I can find given my risk preference (though noting that that itself is risky in terms of maintaining its real value). I suppose the other thing I could do would be to pay more into my pension (I'm a civil servant) and use some of this to cover current expenses. Outside of isas I assume if I invest in other stocks and shares I am hit with taxes if I realise a capital gain?

Sorry that's a long post, but would really welcome any advice.

TIA

L

Albermarle

A few points . First you seem to have got the general idea and therefore maybe a bit more financially savvy than you think !
If you want to beat inflation , you have to invest rather than save, and even then it is not guaranteed and you may well actually lose money . However the longer you keep the investment, the better the chances of a positive result. Normally you should be thinking 10 years + , with a minimum of 5 years .
You could invest some and save some as you say . Especially if you feel that you need to spend some of it in the next few years .
Most likely paying more into your pension to effectively buy more pension in retirement, would be the best value but you would have to check the figures and of course it would be locked up for many years 
If you do invest , a S&S ISA is better to avoid any issues with taxes . You can add up to £20K pa .

You mention the possibility of using a  financial advisor. It is probably not necessary and it will depend on what actual amount of money we are talking about .Normally they would only be interested if it was say £50K + and as you have a public sector pension, they would have no impact or generate any revenue from that .

DoublePolaroid

We are in the process of selling our BTL for exactly the reasons described in the posts immediately preceding this one. This will liberate a substantial sum, which will need to be put to work to try to beat inflation. Whilst I share the rational concerns described above regarding investing given the reasonable expectation that the following decade is unlikely to yield the same level of return as the preceding one, our money will be invested. The key point though being our 20 year investment horizon. If I needed the money in 5 years I would come to a different conclusion. 

Laikos

Thanks everyone. I think that confirms what I have in my head - I see lots of risks everywhere and not much 'reward' on offer. But as it stands I have all my money in one asset (savings) which is falling in value as we speak, and that feels even more risky than holding it in a variety of risky assets (to the extent that the same risks don't impact on all of them in the same direction). I'm coming 'round to the idea of buying some physical stuff, perhaps a property where I ultimately hope to live with my partner (in the EU) would make the most sense as this is the thing I want to have in the end. It still comes with the pitfalls noted above, but perhaps I could just get a managing agent to put it on AirBnB and it wouldn't be too much hassle?

Albermarle

and that feels even more risky than holding it in a variety of risky assets 

There is a saying which fits with your comment. ' Taking no risks is the riskiest thing of all '