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The Hidden Impact of Inflation on Your Savings
Most people don’t realize how inflation silently erodes their savings over time. Learn how to hedge against inflation by strategically investing and adjusting your financial plans.
Most people don't invest, they were taught to save. Thinking gaining interest on their savings will make them millionaire. It would not.
Banks, and the financial system in general, often benefit from inflation at your expense. They encourage you to save because it creates a pool of money they can use for lending and investment. When you deposit money in a savings account, the bank uses that money to lend to other customers or invest in assets that generate higher returns. The interest rates banks pay you for your savings are typically much lower than the returns they make from these loans and investments.
For many UK investors, the Stocks & Shares ISA is a foundational tool for tax-efficient investing. Each tax year, which runs from April 6th to April 5th, you have an allowance of up to £20,000. The primary benefit is that investments held within an ISA are completely shielded from tax. Specifically, you pay:
Zero capital gains tax on your profits.
Zero income tax on any dividends you receive.
This provides a significant advantage compared to a regular investment account, where profits are subject to tax once annual allowances (£3,000 for capital gains and £500 for dividends) are exceeded.
Because the generous £20,000 allowance resets every tax year, many investors consider it a priority to utilize it before the 'use it or lose it' deadline on April 5th.
Tax rules and allowances are subject to change
Disclaimer: Everything on this page is for informational and entertainment purposes only - none of it is financial advice.
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