We are all concerned by the skyrocketing inflation that’s gripping the UK right now. It’s an incredibly complicated (and rocky) economic situation – one that, as history has taught us, will doubtless give way to better days, though that point of relief is not yet in the near future. 

Inflation has a way of making itself known in almost every area of life. From the weekly food shop to our ability to invest and save, there’s no getting away from it.

For so many people, whether they’re just now starting to experience financial independence or whether they’re looking ahead to retirement, inflation represents a big, red question mark hovering over the future. When the situation is as complicated and as out of control as it is now, how can we introduce any sense of order into our own finances? 

The good news is, it’s perfectly possible. Planning for the future has always required time, careful consideration, and the ability to think over the long term. Here’s what you need to know. 

First, Don’t Make Any Momentous Changes

When things feel like they’re starting to spiral, it can be tempting to make drastic changes – particularly when it concerns our finances. Our minds instantly jump to the distant future and to worst-case scenarios. What if I lose my source of income completely? What if I have to dip into my pension before I’m ready (or able) to retire? 

These ‘what ifs’ are very motivating, but the best thing you can do is channel that motivation into seeking advice for the long-term and actioning sustainable, realistic changes to your finances, rather than upending everything and making a hundred changes all at once. 

With the right financial advice, you can feel comfortable about the long-term – not crushed under its weight. At Perennial Wealth, we have been offering financial advice in Bristol and the surrounding area for many years and know how to channel anxieties into tailored financial plans that meet every one of our clients’ goals.

This is far more valuable than drastic action. 

Next, Work Out What Your Goals Are

Nobody retires at exactly the same age, with exactly the same amount invested and saved and exactly the same goals and intentions for retirement. It’s all about what you want to get out of life and what sacrifices you’re willing to make in order to get there. 

You can’t make a plan before you know what you want to do with your retirement. This much is true whether inflation is high or not – whether you’re where you want to be in your career or still working towards that. 

Don’t let the current state of the economy curb your goals for the future. True, they need to be realistic and take into account your current financial situation, as well as what you anticipate for the next few years or decades, but there’s no use setting your sights low just because inflation is high right now. 

Don’t underestimate the power of a few shrewd investments 

Inflation is high right now, but bank rates are shockingly low by comparison. This means that any money you currently have invested into a traditional savings account is unlikely to yield any strong – or even remotely strong – returns. In other words, your money is safe, but it’s being underutilised and won’t reach values it could reach elsewhere. 

The right investments will match your risk tolerance and serve your long-term financial goals. It will put your savings to much better use and underpin your future retirement goals in a way that offers stability throughout the inevitable ebb and flow of the economy.

This is something your financial advisor can help you with. These days, it’s easy to make investments through apps and websites, but the only way to be sure that they’re the best option for you is to talk things through with an unbiased, independent financial expert.

Don’t stop planning when you retire

Ideally, planning for retirement will be the work of many decades, and it can be tempting to see retirement as the ultimate goal or endpoint. But retirement comes with its own set of concerns and considerations, even if you retired with every one of your financial goals met. 

Inflation is reflected in purchasing power, which is why it makes itself known to us in many different parts of everyday life. It’s not a bill that arrives on our doorsteps each month. It’s a little extra here and there – a little less for a little more. 

Just because you’re no longer working doesn’t mean you don’t need to keep planning your finances and working to keep your financial health in check. Plenty of people retire during times of high inflation or economic recession, but the best way to do that is with ongoing guidance from your trusted financial advisor. 

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.