How to Save Money During Inflation in the UK
Many countries are struggling against inflation. The official government consumer price index has risen to 10.1% (Sept 2022) in the UK over the last year. In reality, CPI is probably double the official figure as many items have seen much more significant rises. This is a direct result of quantitative easing and the low-interest-rate policies pursued by governments and central banks to provide a short-term stimulus to the economy while simultaneously stealing the savings from the working poor.
How to save money during inflation in the UK is the critical question for those who want to ensure they have enough money whenever there’s an economic shock and what can be done right now during this time of widespread government created high inflation.
The only long-term answer for many people will be carefully saving money and investing in assets outside the ‘banking system’ with a strong history of preserving value or delivering returns even when economies are weak, inflation is high or both, such as gold and silver or Bitcoin.
In the short term, options are available to ensure that you have enough money in your wallet to act as a buffer against this rising inflation.
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Here are Ten Ways to Save Money During Inflation in the UK
1. Pay Down Debt
Paying off Debt is the best way to get rid of your interest payments forever. It’s an effective way to save money on interest costs, and it removes the worry that you’ll be late with a payment or skip it altogether and default on your debts. If you have credit card or store card debt, try to pay it off as soon as possible. Paying down high-interest credit cards is especially important because they charge high interest based on a percentage of the outstanding balance, so pay more than the minimum each month until they’re fully paid off.
2. Reduce Your Expenses
If you have a few items on your budget that you don’t need, think about cutting them out and using the money to reduce your expenses or increase your income
. This can take some planning and will require some lifestyle changes, but it’s certainly an option that should be considered.
3. Cut Out the Perks
If you have things like cable television, fast food restaurants, lottery tickets, club memberships etc., that you don’t need, then consider reducing the amount paid for these each month to save money in the long term.
4. Use the Savings
Try to set aside some money in an account you can use to buy an emergency fund in case something unfortunate happens. An emergency fund is a savings account for unexpected expenses like car repairs, medical bills or job loss. Because these expenses are unpredictable, having money aside for them is essential as not borrowing from your savings account.
5. Buy Gold and Silver
It’s tough to save money through inflation if you own gold or silver with a long history of producing substantial returns even when economies are weak or inflation is high-even during recessions or depressions. Gold was produced for thousands of years before state-run economies were in place. Gold and silver are the only physical commodities that have always maintained a significant value over time. Silver has a history of being a mighty hedge against inflation and one to which there is no close historical equivalent.
6. Buy Bitcoin
Bitcoin is, in many ways, the ultimate hedge against all forms of money. You can use it to buy precious metals like gold and silver, pay off credit card debt, or invest in tangible assets like real estate or businesses. It’s an excellent way to diversify your investment portfolio because it has a long history of diversifying returns from inflation and other economic uncertainties. The way Bitcoin works mean there is no need for banks or government regulation to keep things stable. There are no restrictions on how much you can own, and you don’t have to fear being blocked from buying more should you run out of money before the price rises again.
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7. Keep Your Savings in Gold and Silver
Gold stands apart from traditional investments because you can use it to hedge against inflation and a weak economy, or you can buy physical gold coins that are likely to rise in value alongside other investments. If you choose physical gold or silver coins, keep them locked in your safe deposit box (not in a bank) to prevent theft.
8. Keep Your Pay Check Safe
When the government secures your employer’s bank account (as with many banks), the government will bail out your employer’s bank if it fails. Therefore, it’s important not to keep too much of your pay check in your employer’s bank account. Try to keep a small amount that you can easily access in the bank but put most of it into a charge that is not at risk if the bank fails. A savings account could be ideal for this purpose.
9. Use Cash More
The cost is more apparent when you use cash for purchases because you have to bring out your wallet or purse and count out the money. Use currency wisely because credit and debit cards make spending easy (even though they come with several costs). Consider using cash when making large purchases or paying people, so you don’t spend more than intended. Also, consider using it to pay at the local store to avoid exceeding your monthly budget and having to borrow money
.
10. Stop Spending
The best way to save money during inflation is to stop spending altogether. If you cut back on unnecessary expenses, you’ll feel more confident about weathering even the worst of economic storms because you won’t have much debt. Plus, you’ll be free from the worry that comes from knowing some things need doing but being unsure of how they will get done or-even worse-not being able to do them because of insufficient resources.
Conclusion
The best way to avoid the stealth tax and expense of inflation is to take steps now because they may not be available later. And no matter how confident we may be, it’s important to remember that there is always a chance that something terrible could happen anywhere and anytime. Remember the recent capitol controls and bank holidays in Greece and Malta!
So next time you check your bank account, remember that this isn’t something new and when you deposit fiat money into your bank, it becomes the banks asset and your liability. It’s an adjustment for most people who have been living in the real world for a long time. In fact, in many ways, we have been adjusting all along. Just because things seem good now doesn’t mean they wont change. The only constant is change! Most of us have been in the middle of a long, successful, but expensive inflation experiment.
How to Save Money During Inflation in the UK
Perry Stevens is the founder of BIGPriceDrops and a long-time digital marketer with a practical interest in helping UK shoppers find better value online. He focuses on clear, no-nonsense money-saving content, Amazon UK deal insights, and buyer guides that help readers spot genuine savings without falling for misleading discounts or impulse-buy traps.
When he is not working on BIGPriceDrops, Perry runs Blend Local Search Marketing and works on digital projects covering SEO, AI tools, and online business growth. His approach is simple: help people make smarter decisions before they spend their money.
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