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You may be a long way from retirement, but if your finances are in the wrong place, it could be longer than you expect.

As the cost of living crisis continues to bite, it might seem sensible to keep a large ‘emergency fund’ as cash in a current or easy-access savings account.

But even though retirement isn’t a near-term event for you, investment decisions you make now could have a big impact on your lifestyle in retirement.

Check your results below.

Consider financial advice

Your answers suggest inflation could have a significant impact on your current savings and/or investments. It may be worth reviewing your current financial plans and seeking professional advice. Book in a free 15 minute conversation with one of our advisers to discuss how we could help.

£50,000 savings could be worth £41,305, after 10 years

The impact of inflation could result in savings of £50,000 being worth only £41,305, in relative terms, after 10 years, resulting in a loss in spending power of £8,695.

In times of financial stress, such as the current cost of living crisis, it is usually sensible to have an ‘emergency fund’ that you can easily access for any increases in your day-to-day outgoings. However, this needs to be carefully balanced against the eroding effect of inflation on any excess cash you are holding which the graph illustrates.

Do you understand the negative effect inflation has on your cash savings?

As consumers, most of us will be feeling the impact of rising prices on our day-to-day spending, especially the soaring price of energy. However, in a recent Schroders Personal Wealth survey, only half of respondents were aware of the impact of inflation on their cash savings – are you?

Read more

In it for the long haul: why invest for the long term

More so now than ever, the current challenging backdrop of sky-rocketing energy prices and the cost of living crisis means many of us are worrying about affording our bills over the next few months rather than how healthy our finances could be in a decade’s time. But concentrating on the short term could be putting your longer-term goals in jeopardy.

Read more on investing long term

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