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The study from Legal & General found:
Emma Byron, managing director of Legal & General Retirement Solutions, said:
"Inflation is at its highest rate for three decades and it's worrying that savers don't realise its eating away at millions of pounds sitting in low-interest paying accounts.
"Understanding the impact of inflation is crucial to understand how much money you have in real terms. Whilst it is essential to keep some cash in the bank for an emergency fund, savers might want to consider other options to make their money work harder."
Legal & General has highlighted three ways of helping protect your savings from inflation.
Tip 1: Work out how much to put aside in an easy-access emergency fund. As a rule of thumb, you'll need enough to cover your essential expenses for three months. You should be ready cover bills like energy, your mortgage, travel and food costs so, should the unexpected happen, you'll be prepared. You can start saving any extra income in more inflation-proof ways.
Tip 2: Get best the interest rate you can on your savings. Make sure that any cash savings you have are getting the highest interest rate possible. These days you can switch savings accounts and ISAs relatively easily. But, if you do find a higher rate, remember that they can quickly go down. For example, it's common for cash ISAs to offer high rates for the first year. Those rates can drop dramatically after the first year. So always set a reminder to keep an eye on any new savings rates you find.
Tip 3: Think about investing your money or topping up your pension to beat inflation. It's important that consumers are aware of the long-term impact of their pension contributions, alongside the compound effects of investing. So if you can stash your savings away for the long term, think about topping up your pension, or investing in a stocks and shares ISA.
People will understandably be feeling unsure about the future at this moment in time, but Legal & General said the key thing to remember is that investing is for the long term. With time on your side, you can balance out the ups and downs of market volatility.
And, if you have an emergency fund, you might well be able to ride out any storms and leave your investments untouched. That'll give them a chance to go back up in value again.