According to a study from Markit, a financial research body, almost 40% of UK households watched as their finances decreased from July to August at a rate not seen since February 2009. Rising prices, falling income and a decrease in savings were blamed for the fall.
are pretty desperate times, but you don't exactly need to resort to
desperate measures. Just because house prices are falling and
purchasing power is decreasing doesn't mean you should abandon hope
of moving home.
Firstly, the Centre for Economics and Business Research is under the informed impression house prices are going to peak at a record high in 2015, at a full 14% higher than they are currently.
Additionally, there are savings accounts on the market that can help mediate the effects of rising inflation. Here are some tips on what to look for.
Individual Savings Accounts are tax-free ways of saving a fixed amount of money each year. Currently the limit is
£10,680, of which up to 50% can be placed in a cash ISA and up to 100% can be invested in a stocks and shares ISA. You will need to look for rates close to 4% and keep an eye out for low deposits, and no arrangement fees.
Spread the risk
If you are interested in playing the stock market, but don't want to expose yourself to a high level of risk in order to potentially make larger profits, spread your risk over a fund. You will pay more to have this kind of account set up, but you will get your own fund manager and your money will be made to work as hard as possible.