+ Comment: Paul Hart, director

Cash, the invisible thief

Back in 1950, Enid Blyton published her book ‘The Mystery of the Invisible Thief’ about a man masquerading in disguise to steal from villagers.

In 2023, our story has a new thief but it is still invisible. If you have too much of your wealth held as cash, inflation is stealing your money, without you even noticing.

The consumer price index dropped marginally in January to 10.1% (from 10.5% in December) but rose again to 10.4% in February to 10.5% from 10.7% in November. The Bank of England voted in March to raise interest rates again in a bid to tackle inflation but the target rate of 2% seems quite some way off.

Some investors believe holding cash is a safe option but in fact, it can be one of the biggest risks to retirement pots. Holding too much for too long can have a substantial impact on your future wealth.

Historic data proves that the most effective way for your money to beat inflation is to maintain investments in the stock market with a well-diversified and risk-appropriate portfolio.

Economists are uncertain of when inflation will start to wane but waiting for a return to ‘normal’ before deciding what to do with your surplus cash is unwise. Similarly, returning your investments to cash during times of market volatility will be challenging –scientific evidence tells us that timing the market is (almost) impossible and investors often find they have held on to the funds longer than intended, missing potential gains.

It is normal to want to hold some cash to deal with life’s unexpected requirements (especially if this gives emotional peace of mind as well as practical) but this should be a small part of your financial strategy.

In the early fifties, when Enid wrote her ‘Invisible Thief’ book, inflation hovered around 9 per cent. It did eventually fall to nearly 0 per cent but took a decade to do so.

+ Time running out to boost state pension

Individuals with gaps in their national insurance record between 2006 and 2016, will now have until 31 July 2023 to make voluntary contributions to HMRC in order to gain the full state pension.

The original deadline has been extended from 5 April because many people reported being unable to get through to government helplines set up to assist those checking figures and historic data.

After the summer deadline, it will only be possibly to top up gaps

+ In brief

Adding to our team

We have recently welcomed Jade Ballard to our client services team. Jade assists our advisers and helps clients with any queries. She also holds a first-class degree in criminology with criminal law.

in the national insurance record from the previous six tax years. In general, taxpayers need 35 years of national insurance payments to get a full state pension. Those who do not have enough qualifying years can pay to boost their record by making additional contributions – a lucrative exercise for most as a relatively small outlay can generate a much larger pension at retirement.

To check your national insurance record or obtain a state pension forecast, please visit www.gov.uk/voluntary-nationalinsurance-contributions