03/09/2026
£100,000 sitting safely in the bank can feel like the sensible option.
And sometimes, it absolutely is.
But there’s a risk to cash that’s easy to overlook.
Inflation.
If the interest you’re earning on your savings isn’t keeping pace with inflation, your bank balance may still say £100,000…
…but the real value of that money is falling.
Here’s a simple example.
If inflation averaged 3%:
Today
£100,000
In 5 years
You’d need around £115,927 to have the same spending power.
In 10 years
You’d need around £134,392.
You haven’t technically “lost” £34,392.
But the things £100,000 could buy you today could cost around £134,392 in 10 years.
That’s the hidden cost of inflation.
Now, this doesn’t mean cash is bad.
Cash has an important job to do. Emergency funds. Tax bills. Planned purchases. Money you may need in the short term.
But if you’ve accumulated a significant amount of cash with no particular purpose and no plans to use it for several years, it may be worth asking whether all of it needs to be sitting there.
Because there are different kinds of financial risk.
Investing carries risk.
But doing nothing can carry risk too.
The question isn’t simply:
“Is my money safe?”
It’s:
“Is my money in the right place for what I want it to do?”
Figures are illustrative and assume constant inflation of 3% a year. They do not take into account interest earned on cash. Cash savings and investments serve different purposes. The value of investments can fall as well as rise and you may get back less than you invest. Tax treatment depends on individual circumstances and may change. This information is for general guidance only and does not constitute financial advice.
