5 Tips to protect your savings against inflation

www.capital.co.uk capital* 5 TIPS TO PROTECT YOUR SAVINGS AGAINST INFLATION The ever-increasing cost of living has seen the value of savings fall, but you can fight back with some financial planning and these five inflation-busting tips. TIP 1 CHOOSE YOUR ISA CAREFULLY Most cash ISA rates do not keep up with CPI, the index that measures inflation. However, there are a handful that pay more, so be sure to keep an eye on best buy tables. If you are nearing retirement, a cash ISA is a good safe haven to consider. TIP 2 GO FOR GILTS If you are five to ten These are linked years away from retirement you could use your full Investment ISA allowance to buy inflation linked gilts. to RPI, which has averaged around 0.7% higher than CPI over the past 20 years. TIP 3 GET YOUR SHARE Returns on equities can beat inflation when you take into account the value of reinvested dividends Barclays' 2011 Equity Gilt Study calculated £100 invested in equities at the end of 1899 would be worth just £180 in real terms today without the reinvestment of dividend 2013 income; with reinvestment, the same portfolio would have grown to £24,133. TIP 4 GO FOR PROPERTY... A collective investment or fund may be a wiser idea - some funds invest in Investing in Buy to Let property has been a rewarding experience for many but caution and experience are essential as it can be a Investing in property both residential and physical property and others in property companies. You can hold the funds in an commercial has been a good hedge against inflation over the long ISA or pension account. complex process. term. TIP 5 BECOME A BANK Peer-to-peer websites which unite lenders with borrowers can earn those with money to invest up to 8% in return. Of course lending to others does carry a risk. Earn 8.9% with Funding Circle, 6.2% with Ratesetter or 5.4% after a 1% fee with Zopa. 8.9% 6.2% 5.4% 1% Spread your risk by lending a little with each one. As always, it makes sense to speak with a qualified financial planner who can help you build a personalised plan to mitigate the effects of inflation on your investments. capital* ASSET MANAGEMEN For more information download our eGuide: Your ten step retirement checklist Disclaimer We try to ensure that the information provided is correct, but we do not give any express or implied warranty as to its accuracy. We do not accept any liability for errors or omissions. We are not liable for any damages (including, without limitation, damages for loss of business or loss of profits) arising in relation to the information provided or from any action or decision taken as a result of using t website links. The information provided does not constitute financial or other professional advice. You should consult a professional adviser if you require financial advice. information or The materials provide links to other sites. We do not control the linked sites and are not responsible for the contents of any linked site or any link in a linked site, or any changes or updates to such sites. We provide these links to you only as a convenience, and the inclusion of any link does not imply our endorsement of the site. Some information has been provided by third parties. We are not responsible for any error, omission or inaccuracy in the material. O Capital Asset Management 2013