To beat inflation, you’ll need to find places to invest your money that offer the potential for higher returns. But remember, bigger returns often come with higher risk. The value of investments can fall as well as rise, and you may get back less than you’ve invested.
Pensions
Pensions are designed to deliver returns over the long term and support you in retirement. To encourage people to save for retirement, the government gives tax relief when you pay intoone, up to certain limits. You won't be able to access any pension savings untilage 55 (57 from 2028).
Your first choice should be a workplace pension, if you can get one, as your employer will top up your contributions. If that’s not available, you could start your own pension, like a Self-Invested Personal Pension (SIPP), where you have more control over your investments. At Aviva, we offeran award-winning SIPP.
Stock and shares
Investing in stocks and shares has historically been a good way to beat inflation over a long period of time. You can choose to spread your investment across lots of different sectors and countries to try and increase your gains over time.Stocks and shares are often bundled together into investment funds, to make investing in them a little easier.
Using an ISA can also help boost your gains, as any money you make will be free from UK Income Tax or Capital Gains Tax. In the tax year 2024/2025 you can invest up to £20,000 and at Aviva, we havea Stocks & Shares ISA, which you can manage easily online.
Property
Property can have inflation-busting benefits. When you own an investment property you’ll benefit from any increase in its value, but may also receive monthly rental income.
As with any investment though, property can go through times where prices drop. In 2023, inflation was high in the UK and average property prices dipped slightly over the year . So, the value of property was falling faster when you take inflation into account.
Commodities
In times of high inflation, the value of commodities like gold and other precious metals, raw materials like steel and farm produce like corn, can increase. By investing in commodities themselves orchoosing funds or Exchange Traded Funds (which trade during the day rather than having a fixed price after the market closes) that focus on commodities, you can aim for higher returns.
