What is inflation and how does it affect my savings?
Inflation is the general rise in prices, which reduces what your money can buy over time.
Inflation is the general rise in prices over time. As prices rise, each unit of money buys less than before.
It affects your savings if the interest you earn is lower than the inflation rate.
An example
If prices rise by 5% in a year and your savings earn 2%, your money can buy about 3% less than before, even though the balance looks bigger.
What you can do
Shop around for the best savings rates, consider long-term investments for money you will not need soon and review your budget as costs change.
Keep perspective
Inflation rates change, so check current figures for your country from official statistics.
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