Prices rise a little each year, and cash that sits still quietly buys less. At three percent inflation, the money you hold today can lose about a quarter of its purchasing power over a decade. For savers, that is the real cost of doing nothing.

Keep cash for a reason

Hold an emergency fund and any money you need within a year or two in an easily reached account, and keep it separate from long term savings. Compare rates regularly, because the best accounts often pay more than the default one at your bank.

Let the rest do some work

Money you will not need for five years or more can go into investments that have historically grown faster than prices. Inflation linked bonds and a diversified mix of shares are two common ways to protect purchasing power without taking needless risk.

Review your plan each year. If your costs are rising faster than your income, we will look at where adjustments make the most difference.