Brits ‘must think differently about cash’ as Rachel Reeves inflation chaos to hit wallets | Personal Finance | Finance
Britons have been warned they need to reconsider how they save money after the UK’s inflation unexpectedly shot up. Two financial experts have suggested people should begin moving their cash into savings accounts, with one warning savers need to have a “change of mindset”.
David Belle, trader at investment service Fink Money, said Brits need to rethink their relationship with risk, and adopt the approach of their US counterparts. He told the Express: “Savers have to start thinking differently. All the more so given that inflation is rising again. There is arguably as much risk sitting in low interest cash in an inflationary environment as there is in being in theoretically riskier investments.
“As inflation increases, the downside of not seeking a greater return is amplified. Low risk can, as bizarre as it sounds, become high risk. It’s a change of mindset savers need to understand.”
Philly Ponniah, chartered wealth manager and financial coach at Philly Financial, also suggested Brits should consider investing.
She told the Express: “It’s crucial to hold cash only for short-term needs and emergencies, and consider investing the rest if you’re comfortable with risk.
“Keeping too much in cash could be seen as the bigger risk long term.
“If you are totally risk averse and want to stay in cash, at least do your homework to ensure you are getting the best rates possible. Equally, find an adviser or financial expert who can help.”
Ms Ponniah added: “But whatever you do, do not do nothing”.
It comes as official figures show UK inflation rose to a near 18-month high in June.
The Office for National Statistics (ONS) said Consumer Prices Index inflation rose to 3.6% in June, up from 3.4% in May and the highest since January 2024.
The increase was unexpected, with most economists forecasting inflation to remain unchanged at 3.4%.
Annual food price inflation has also hit the highest level since February 2024, the ONS added, while transport costs are too impacting the cost of living.
