The eternal battle: Interest vs Inflation

Inflation is the general increase in prices year on year so if a pint of milk cost £1 in 2019 but now costs £1.05 in 2020, this means inflation was at 5% and now you can buy less pints of milk with the same amount of money, if your income stays the same. To counteract this I am always looking for ways to fight the eroding nature of inflation. Interest rates are the banks reward for keeping your money with them but they hardly ever match or outperform inflation, but you can get close if you are savvy enough.

Banks offer various rates of interest to entice you to switch to them but there are no rules to the amount of current accounts you can have, which is why I have around 8. My most recent opening was Virgin Money who were offering 2.02% for up to £1000 and with the current state of the economy, I may be marginally saving myself from the erosion of inflation. I found this latest saving grace from Martin Lewis, otherwise known as the Money Saving Expert. You can Sign up to his weekly email here which is full of great hints and tips.

Interest will hardly ever beat inflation so for my money to make more money I have to find other ways rather than just letting it sit in the bank. Check out next weeks blog/email for more information on this!

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