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How to cut costs and beat inflation?

It's easier to build a better future and a good retirement if you've got solid foundations in place. Right now, the high cost of living might make that feel more challenging, but there are still things you can do to support your future finances. Find out how to cut costs now, and better protect yourself against the long term effects of inflation.

How inflation impacts you right now

Rising prices (and interest rates) don’t mean the same thing for everyone’s wallet and everyone's way of living.

For example, any debt you have will get more expensive as interest rates rise. But if you have credit card debt that you can secure for a while at 0% (and you don't have to use the card again), you’ll be less impacted than someone whose interest rate is rising and who’s still having to use their card.

Then there are factors like where you live, how you commute to work and whether you have children. The price of things like energy, housing and food could affect you more during times of inflation. Cutting costs in those areas can help your money go further. Look at the tips below to see what changes you could make.

If you need help with your finances, we’d always recommend getting in touch with a financial adviser.

Tips for cutting costs


Unplug appliances

Televisions, laptops, and other devices can use energy even when you’re not using them. Unplug them to make sure they’re not costing you money in standby.


Use off-peak hours

If your supplier charges more during certain hours, try and do more energy-hungry tasks, like washing clothes or showering, during the hours when it’ll cost you less.


Steamline subscriptions

If you're paying for things like streaming services, apps, memberships or other subscriptions, decide whether they all offer you value. Consider cancelling any that don't.


Make a shopping list

And stick to it. That will mean that you only buy the things you truly need - and not any of those tempting little extras.


Shop around for deals

During these times, it pays to shop around. Look out for bargains, hunt down discount coupons and keep an eye on the sales.


Speak to your bank

Banks sometimes offer payment holidays on loans or interest waivers on overdrafts when customers are having financial difficulties.

Fighting the long-term effects of inflation

Higher prices don't only hurt your finances in the short term. They also erode the value of your savings over time and make it harder for any assets you own to hold their value.

The effect is particularly acute on cash savings, where returns are likely to be low and long way behind the rate of inflation. It's forced some people to reassess whether they should reallocate some money that they currently hold in cash to investments, where there is at least a chance they can grow enough to match inflation.

There are some important caveats to this:

Keep some cash

You still need enough cash to cover you in an emergency. Refer to our Protection page to learn more about building an emergency fund.

Investing means taking more risk

Make sure you're fully aware of the risks. You can read our guidance and/or talk to a financial adviser.

Helping you navigate uncertainty

Following the tips above could help you save money in the short term.

We do understand that when times are tough, it’s tempting to use your money to make things more comfortable now rather than invest in your future. But often, if possible, the best thing you can do is keep paying into your retirement funds and keep your focus on your long-term goals. Future-you will thank you for it.

You’re not on your own. Our new ‘Navigating uncertainty’ page will help guide you through these uncertain times.


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