Purposeful financial decisions to tackle inflation

Official statistics show the headline rate of inflation peaked at a 41-year high of 11.1% last October, and although economists expect it to continue falling for the rest of this year, the rate has so far remained stubbornly high. 

Over the last year, the elevated rate of inflation has had a far-reaching effect on people’s financial circumstances, but research1 suggests the impact is not widely understood, with over half of UK adults failing to grasp how rising prices eat into the buying power of their savings. 

Damage limitation 

Taking time to review your financial choices can ensure you continue to make appropriate decisions that will limit inflation leaving a lasting impression on your financial future. For example, inheritance is one area where high inflation can have a profound effect. When combined with the continuing nil-rate threshold freeze, soaring prices inevitably mean more estates are likely to be dragged into the Inheritance Tax net. Careful planning can limit any future liability and preserve people’s ability to pass on assets. 

Cost-of-living pressures are leading many people to cut back on pension contributions to make ends meet, without realising the lasting damage such decisions can make. Analysis2 based on various assumptions (about factors such as salary, investment growth and pension contribution rates) shows that if someone opts out of pension contributions for five years in their 20s it could reduce their final retirement pot by £114,000 at age 66. 


It is often worth revisiting what initially inspired you to set your financial goals in the first place. Reconnecting with those original motivations can encourage you to stick to your plans and help maintain control over your financial destiny. We can implement a plan to limit inflation’s impact on your future financial wellbeing. 

1Aviva, 2022 

2Standard Life, 2023 

 It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.