Living with Inflation: Essential Financial Advice to Safeguard Your Finances

With good financial planning, you can help to avoid a long-term negative impact on your finances.

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Living with Inflation: Essential Financial Advice to Safeguard Your Finances

With good financial planning, you can help to avoid a long-term negative impact on your finances.

As inflation and its rising rate is now a constant in the UK, understanding why this is happening and what you can do to combat its effects is important. With good financial planning, you can help to avoid a long-term negative impact on your finances.

So, what exactly is inflation and what does it mean for you?

Well, inflation is a significant player in keeping the economy balanced.

Essentially, moderate inflation is a sign of a healthy economy and the Bank of England (BOE) has set the target for the consumer prices index (CPI) at 2% as being not too hot or not too cold to maintain a long-term healthy economy. Either side of this number can be bad for the economy as it can lead to people spending less because they either have less disposable income when essential expenditure rises or they wait for better deals in the future if prices are constantly falling.

The current higher inflation rate has now exceeded all expectations, driven mainly by the zero covid policy in China, which re-introduced lockdowns and has led to global supply chain disruption and the ongoing war between Russia and Ukraine which has caused a worldwide crisis in energy, food and other commodities. This has meant the economy has faced many unpredictable hits this year. However recent data points to a small improvement in the inflation outlook and there are hopes it will fall back to the Bank of England target of 2% by the end of 2023.

Currently, where we stand right now, 91% of adults in Great Britain have reported an increase in their cost of living in October-November this year since the same period in 2021.

Being able to combat these rising costs in a simple yet effective manner may allow those who are feeling the pinch to be in a more manageable position.

So, what can you do?


Making smart investment choices could provide extra income or provide the opportunity for returns above inflation through capital growth over the longer term. It’s important to diversify your investments as much as possible to capture different returns from different sectors and to manage your level of risk.


Make sure your savings account is earning a competitive rate of interest, if not switch it to another account with better terms. Cash savings are notorious for losing value when inflation is rising and therefore the higher the interest rate the better to close the gap with the rate of inflation.

Review your spending

If you find yourself scratching your head wondering what have you spent a certain amount of money on, then you’ve ‘leaked’ money. Write down how much you spend on essentials, lifestyle and luxuries for the month and decide where you can cut back.

Look at any subscriptions you are paying and decide if they are no longer required, can be suspended for a short period or you are doubling up. A good example of this is breakdown services, which may be provided automatically through your bank account and yet you pay a separate subscription to a national breakdown service.

British households throw away tonnes of food every week. Often, people misjudge how much they will need or get tempted by supermarket offers, which means spending more than is necessary. Make a shopping list of what is actually needed and stick to it.

Lower your household bills

Some quick wins can include turning down the heating thermostat by a few degrees and if you wash your clothes on a hot cycle, change the temperature to 30C to save electricity and run it on a short wash.

Fixing your mortgage rate

If you have a tracker or variable-rate mortgage, or if you are waiting for your fixed-rate deal to end, investigate entering into a new fixed-rate mortgage so that you can shelter yourself from further increases in interest on your repayments. Shop around for the best deals.

Financial planning

In order to power through the current volatile economic conditions, ensuring that you have proper financial planning underway can help you get to grips with your overall financial situation and see ways in which you can make simple changes to improve your finances. For more information and help with financial planning, investments and savings, visit Piercefield Oliver.

Stephen Willis

Stephen Willis

Founding Partner
Piercefield Oliver