Four personal finance experts comment on inflation drops

May 24, 2023

PENSIONS

Lily Megson, Policy Director at My Pension Expert, said: 'Consumers will undoubtedly be pleased to see inflation figures back in single digits for the first time since September last year. Yet the hard truth is that it has taken far too long for this to happen; there is still a considerable way to go before the conditions for the security of people’s savings improve.

We can’t ignore the reality faced by many Britons; food and energy prices are continuing to soar, whilst over a year of rocketing inflation rates have hit savings hard. And for some, the prospect of achieving a financially secure retirement still hangs precariously in the balance. After all, My Pension Expert’s own research found that over a third (34%) of UK adults feel that the cost-of-living crisis will delay their retirement.

It is vital that the Government commits to providing adequate support to people concerned with their future financial prospects. Free guidance is a reasonable start; however, more must be done. Ensuring individuals understand where and how they can access independent financial advice would be a powerful move to helping savers to better understand the financial situation. More importantly, doing so could help them to remain on the right track to the financially secure retirement they deserve.'

SAVINGS

Andy Mielczarek, Founder and CEO of SmartSave Bank, a Chetwood Financial company, said: 'Although today’s figures show that efforts to reduce inflation are finally bearing some fruit, the cost-of-living crisis isn’t over yet. Underlying price pressures in the economy show little sign of improvement, and despite inflation’s drop into single digits, this means that consumers will continue to be impacted by high costs. Yet this environment remains great for those able to save, as long as they're saving in the right place.

In the current climate, the majority of easy-access savings accounts will not be able to keep pace with inflation, meaning that a significant number of people are seeing their money losing value in real terms. Worse still, our research shows that a worrying percentage (97%) of the UK’s savers are relying on current accounts alone to house their money, while uptake for different savings products – from ISAs to fixed-rate bonds – is low across the board.

Even though pressures on the economy are gradually easing, it’s vital that people in a position to put money away each month are proactive about how they are managing their savings to beat inflation. For those looking to deposit a lump sum, fixed-term, fixed-rate bonds can be a good option when it comes to accessing higher interest rates, while many people could also benefit from exploring their options beyond the savings accounts offered by high-street banks.'

FOOD PRICES

Mohsin Rashid, CEO of ZIPZERO, said: 'Inflation falling into single digits after seven long months is certainly welcome news to Britons everywhere. But we are by no means in the clear. Inflation remains at astronomic levels and, crucially, high prices continue to hit consumers’ pockets where it hurts the most: their grocery bills.

“Even with savvy spending, consumers are very limited in what they can do given the extreme price rises they have been subjected to over the past 18 months. Shoppers are having to make very difficult choices, with some even skipping meals, relying on food banks, or getting into debt to put food on the table for their household. Britons need relief from endless price hikes; equitable solutions must be found between supermarkets and their customers.'

LACK OF BUSINESS SUPPORT

Chieu Cao, CEO of Mintago, said: 'While it’s encouraging to see inflation falling, the financial burden faced by Britons is set to remain steadfast, and many people will feel like their finances are spiralling out of control.

Ultimately, there is no quick fix. Yet with Mintago’s research finding that just 29% of employees have received financial wellbeing support from an employer that has actually improved their financial situation, it is blatantly clear that millions of individuals are being under-supported. Something needs to change, and fast.

Employers cannot just talk the talk about financial wellbeing, but they must also walk the walk. Nor can they rely on a one-size-fits-all approach to providing financial wellbeing support. Instead, employees must be given access to robust, meaningful support measures suited to the current economic climate; measures that, crucially, meet the unique needs of each and every individual.'