We have all been made aware of the changing economic climate in recent months. Interest rates have risen to 1%, their highest level since 2009, inflation is at a 30-year high and is likely to hit 10% by the autumn.
The war in Ukraine has driven up fuel and energy prices and as a result many households are reducing their spending which in turn has a negative impact on growth.
The Bank of England’s Monetary Policy Committee has said that there has been “a material deterioration in the outlook for UK economic growth” and “the effect of this is a real risk that the UK could find itself in a period of recession”.
But what does this mean to those who have savings or investments and what actions should they be taking?
With inflation at such a high, those with savings (be they cash holdings, ISAs or pension plans) should review their financial plans with an independent expert to fully understand how this climate has affected performance.
Whether it is rising prices or the war in Ukraine, taking time to assess your finances against such a backdrop will allow you to better understand if your money is working hard enough for you and if you are on track to achieve your financial objectives.
Please note: This article is provided for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions.
Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.
The value of your investment can go down as well as up and you may get back less than you have invested.
The Financial Conduct Authority does not regulate Taxation advice.