• Contact us
  • About us
  • Digital edition
  • Online archive
Saturday, July 26, 2025
Cumberland and Westmorland Herald
  • News
    Arrest following violent disorder in Pooley Bridge

    Arrest following violent disorder in Pooley Bridge

    Work starts on multi-use games area in Penrith

    Work starts on multi-use games area in Penrith

    Penrith businessman bitten by dog

    Penrith businessman bitten by dog

    End of road for Cumbria Classic Coaches after 28 years

    End of road for Cumbria Classic Coaches after 28 years

    Farm diversification project set to blossom

    Farm diversification project set to blossom

    71-year-old cyclist gets on his bike to Rome

    71-year-old cyclist gets on his bike to Rome

    Appleby car park and road to close for flood work

    Appleby car park and road to close for flood work

    Road closure plans for essential bridge repairs

    Road closure plans for essential bridge repairs

    Penrith drug dealer jailed

    Penrith drug dealer jailed

  • Sport
    Teen golfer George Curry lines up with world’s best players

    Teen golfer George Curry lines up with world’s best players

    Ullswater Community College footballers make history

    Ullswater Community College footballers make history

    New management set to lead Appleby Football Club

    New management set to lead Appleby Football Club

    Success for fighting squad

    Success for fighting squad

    Penrith skipper Nicky Burns calls on team to keep winning

    Penrith skipper Nicky Burns calls on team to keep winning

    £100,000 target for new changing rooms extension

    £100,000 target for new changing rooms extension

    Medal success for Upper Eden tug-of-war team

    Medal success for Upper Eden tug-of-war team

    Eden man competes in Hyrox World Games

    Eden man competes in Hyrox World Games

    Double national triumph for Stuart Robinson

    Double national triumph for Stuart Robinson

  • Obituaries
  • Nostalgia
  • Online archive
  • Buy Photos
  • Buy your paper
  • North Lakes Living
No Result
View All Result
Cumberland and Westmorland Herald
  • News
    Arrest following violent disorder in Pooley Bridge

    Arrest following violent disorder in Pooley Bridge

    Work starts on multi-use games area in Penrith

    Work starts on multi-use games area in Penrith

    Penrith businessman bitten by dog

    Penrith businessman bitten by dog

    End of road for Cumbria Classic Coaches after 28 years

    End of road for Cumbria Classic Coaches after 28 years

    Farm diversification project set to blossom

    Farm diversification project set to blossom

    71-year-old cyclist gets on his bike to Rome

    71-year-old cyclist gets on his bike to Rome

    Appleby car park and road to close for flood work

    Appleby car park and road to close for flood work

    Road closure plans for essential bridge repairs

    Road closure plans for essential bridge repairs

    Penrith drug dealer jailed

    Penrith drug dealer jailed

  • Sport
    Teen golfer George Curry lines up with world’s best players

    Teen golfer George Curry lines up with world’s best players

    Ullswater Community College footballers make history

    Ullswater Community College footballers make history

    New management set to lead Appleby Football Club

    New management set to lead Appleby Football Club

    Success for fighting squad

    Success for fighting squad

    Penrith skipper Nicky Burns calls on team to keep winning

    Penrith skipper Nicky Burns calls on team to keep winning

    £100,000 target for new changing rooms extension

    £100,000 target for new changing rooms extension

    Medal success for Upper Eden tug-of-war team

    Medal success for Upper Eden tug-of-war team

    Eden man competes in Hyrox World Games

    Eden man competes in Hyrox World Games

    Double national triumph for Stuart Robinson

    Double national triumph for Stuart Robinson

  • Obituaries
  • Nostalgia
  • Online archive
  • Buy Photos
  • Buy your paper
  • North Lakes Living
No Result
View All Result
Cumberland and Westmorland Herald
No Result
View All Result
Home Expert advice
This article appears as part of a paid partnership with Armstrong Watson

Inflation and the impact on savings

By Sarah Tallentire, financial planning consultant, Armstrong Watson

by CWH
11 July 2025
in Expert advice, News, Sponsored
A A
Share on FacebookShare on Twitter
Sarah Tallentire

After many years of low interest rates, savings rates have made a significant comeback over the last few years.

UK interest rates generally increased, reaching a peak in early 2023 before experiencing a decline in late 2024 and early 2025.

The Bank of England began raising interest rates in late 2021 to combat inflation.

This resulted in a sharp increase from 0.1% in December 2021 to 5.25% in August 2023. The current base rate is 4.25% (June 2025).

Inflation continues to exceed the 2% target and commentators anticipate it to persist at similar levels throughout the year.

Consequently, monetary policy is likely to remain tighter, with higher interest rates, than previously expected.

How does a changing interest rate impact savings?

A falling base rate is likely to see a reduction in the returns offered to savers by banks and building societies.

Any cut could particularly affect those who take the interest from savings to top up their income.

Considering economic turmoil in recent years, caused by trade wars, the coronavirus pandemic, and Liz Truss’s 2022 mini-budget, some savers have sought safe havens for their money.

In times of trouble, cash is traditionally seen as offering capital security over other assets such as shares, fixed interest, and property.

Risks to holding high levels of cash

However, savers still need to apply caution. Even in ‘normal’ times, some people hold high cash balances, perhaps to meet capital expenditure in the short term or just to provide extra peace of mind, but there are unseen risks – namely inflation, which reduces the purchasing power of each pound held.

There is also another risk to holding cash. There are limits to the amount of protection provided when holding cash for all other deposit providers, bar the Treasury-backed NS&I.

The Financial Services Compensation Scheme (FSCS) offers individual account holders protection up to £85,000 (£170,000 joint account) if their banking/building society or credit union is unable to meet its obligations to investors – however, additional care is needed, as this is restricted where you save across various accounts within the same banking group (where they have a shared banking licence).

Finally, holding cash in savings accounts can attract tax on the interest.

Basic-rate taxpayers can earn £1,000 a year in interest tax-free, while higher-rate taxpayers can earn £500 tax-free. It is important to make use of tax wrappers that mean you don’t attract unnecessary tax on the interest,

What can you do with your hard-earned savings?

Armstrong Watson offers a cash management service that could help improve the overall interest your savings earn for you and can keep you within the FSCS compensation limit.

Cash itself is not risk-free. Although the capital may be secure, it is easy to overlook the power of inflation, which erodes the value of savings.

Investing in cash may lead to financial disappointment; although it hasn’t been the case for the last 20 months or so, historical trends show savings rates tend to be lower than inflation, meaning prices rise faster than the value of your savings.

Everyone should have an emergency cash reserve to pay for unexpected bills, classed as short-term savings.

However, for capital you don’t need access to in the foreseeable future, it may be time to consider whether alternative options, which aim to achieve a better return ahead of inflation, may be suitable.

Our Introduction To Investing aims to help you understand, whatever your knowledge and experience, the principles of saving via bank deposits to investing.

The intention being to help you to make informed decisions.

For independent financial advice, please contact 01768 222030 to discuss how we can help or email help@armstrongwatson.co.uk

Past performance is no guarantee of future performance. The value of investments can fall as well as rise and investors may not get back their original investment.

Related Posts

Arrest following violent disorder in Pooley Bridge
Latest

Arrest following violent disorder in Pooley Bridge

26 July 2025
Work starts on multi-use games area in Penrith
Latest

Work starts on multi-use games area in Penrith

26 July 2025
Penrith businessman bitten by dog
News

Penrith businessman bitten by dog

25 July 2025
End of road for Cumbria Classic Coaches after 28 years
Latest

End of road for Cumbria Classic Coaches after 28 years

25 July 2025
Farm diversification project set to blossom
Farm and Countryside

Farm diversification project set to blossom

25 July 2025
71-year-old cyclist gets on his bike to Rome
News

71-year-old cyclist gets on his bike to Rome

25 July 2025
No Result
View All Result

Stay connected

Facebook Twitter Instagram

Most popular

71-year-old cyclist gets on his bike to Rome

71-year-old cyclist gets on his bike to Rome

25 July 2025
Ullswater Community College footballers make history

Ullswater Community College footballers make history

25 July 2025
Arrest following violent disorder in Pooley Bridge

Arrest following violent disorder in Pooley Bridge

26 July 2025
Teen golfer George Curry lines up with world’s best players

Teen golfer George Curry lines up with world’s best players

25 July 2025
Penrith drug dealer jailed

Penrith drug dealer jailed

22 July 2025
Man who damaged Penrith’s Paddington Bear appears in court

Man who damaged Penrith’s Paddington Bear appears in court

22 July 2025
Cumberland and Westmorland Herald Logo

33 Middlegate
Penrith
Cumbria
CA11 7SY

Phone: 01768 862313
Email: news@cwherald.com

Registered in England as Barrnon Media Limited. No: 12475190
VAT registration number: 343486488

Explore

  • News
  • Sport
  • Farming
  • Property
  • Obituaries
  • Nostalgia
  • Your view

Useful links

  • Contact us
  • Photosales
  • Online archive
  • Buy your paper
  • Digital edition
  • North Lakes Living
  • Advertise
  • About us

Follow us on

© Barrnon Media Limited 2025

Terms & Conditions / Privacy Policy / Cookie Policy

This website and its associated newspaper are members of the Independent Press Standards Organisation
Review Your Cart
0
Discount
Add Coupon Code
Subtotal
Total Installment Payments
Bundle Discount
Checkout

 
0
No Result
View All Result
  • Home
  • News
  • Sport
  • Obituaries
  • Nostalgia
  • Online archive
  • more
    • North Lakes Living
    • Buy Photos
    • Buy your paper
    • About us
    • Contact us

© 2020 Cumberland & Westmorland Herald