Cost of living: 4 tips from experts to navigate rising costs

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While food prices soaring to 11.6% in October adds to the ongoing cost-of-living crisis, consumers across the UK must rethink where they’re storing their finances. 

The British Retail Consortium’s latest monthly report shows that food prices have risen at the fastest rate on record, increasing to 11.6% in October compared to 10.6% in the previous month.*

With interest rates expected to continue rising to curb the impact of inflation, this means that UK households must brace for a significant hike to the cost of living within the country. As households continue to be stretched, now is the perfect time for savers across the UK to consider alternative ways of securing their wealth. 

Kinesis Money provides guidance on how gold investment can support households across the UK navigating the cost-of-living crisis, both immediately and in the long-term: 

  1. Forget savings accounts 

While interest rates are rising, the return on strong wealth in a savings account is being outstripped by inflation. 

Put simply, as the rate of inflation continues to rise, the spending power and value of currency falls. Households should rethink where and how their money is stored, with a current economic model that no longer serves ordinary people.  

2.                   Consider the stock market 

Those looking for their savings to keep pace with inflation must seriously consider their approach.  

Taking advantage of capital yielding assets such as stocks and bonds give households the possibility of earning revenue in a low – or even negative – yielding environment. Of course, as the cost of living rises, this presents the challenge of finding surplus cash to invest in the long term, while balancing short-term monetary commitments.  

3.                   Rethink cash 

Cash is now more vulnerable than ever to depreciation. In June 2020 alone, the US printed more money than in the first two centuries after the country’s founding, as a fiscal response to the pandemic.  As more and more money is printed and inflation keeps going up and up – the less consumers can buy with their cash. 

With any portfolio, diversification is the key to securing wealth and mitigating risk across a variety of asset classes.  

4.                   Consider alternatives

If households are really looking for their wealth to keep pace with inflation, they might want to look to precious metals. As gold and silver are historically stable and unaffected by money-printing, investing in these assets can prove an optimal haven during times of high inflation. 

It’s becoming easier to spend on everyday items as technology is making gold more accessible to the masses.

Therefore, people in the UK can protect their wealth from depreciation, while also spending gold as if it were any other currency. Households can now utilise the full benefit of a gold investment to purchase their morning coffee, in addition to putting money behind their child’s schooling or a gold-backed retirement fund.  

In recognition of these problems, Kinesis Money has introduced a new Virtual Card which allows users to spend their digitally allocated gold in real-time with instant conversion to traditional currency, anywhere that accepts MasterCard. This space is growing and continues to make it easier for people to spend and save with alternative assets. 

Jai Bifulco, Chief Commercial Officer of Kinesis Money, says: “As inflation continues to spiral, and prices on everyday items rocket, households across the UK are facing immense pressure. The cost-of-living crisis is giving people no choice but to reflect on their finances and rethink where they’re storing their wealth.

“We’ve pulled together a few tips to help people get through this period in the short-term and, most importantly, in the long-term. Whatever the answer, consumers need to consider safe-haven assets in order to protect their wealth and ride out the storm – particularly as the majority of people’s cash savings are losing every day, while sitting in a low-interest current account. 

“New technology is making it possible to store wealth in gold, cryptocurrencies and other precious metals. For instance, in response to these turbulent times, we have brought forward a means for gold to be fully integrated into the wider economy as money with the Kinesis Virtual Card. By digitising physical gold and allowing people to spend it anywhere via their card, we have provided individuals with a real solution.”

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