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UK inflation is forecast to remain the highest in the G7, meaning cash alone may not keep pace. Investing — with diversification, growth potential, and compounding — gives your money a better chance to outpace rising prices and protect long-term wealth.
Inflation is proving a challenge in 2025, with the OECD forecasting that the UK will have the highest rate among G7 nations (averaging about 3.5%) according to the BBC1.
For all of us, it’s a reminder of how inflation can quietly eat away at your money if it’s just sitting in cash.
But fear not, there are ways to beat it — and investing can be one of the most effective.
Here’s why investing helps you fight back.
- Growth that outpaces prices: Unlike cash, investments such as stocks and bonds have historically delivered stronger long-term returns, giving your money a real chance to stay ahead of inflation.
- Income that cushions the blow: Dividends from shares or interest from bonds can provide an extra source of income towards your day to day living expenses affected by inflation.
- Compounding that builds over time: By reinvesting your returns, your money starts earning on itself. This creates a snowball effect that strengthens your protection against inflation.
Why it matters for you
Inflation isn’t going away overnight, but that doesn’t mean you’re powerless.
By putting your money to work through investing, you give yourself the chance to grow your wealth faster than prices rise – something that saving alone can struggle to achieve.
It’s not about taking wild risks. It’s about building a balanced portfolio, giving your money more opportunity to grow, and making sure inflation doesn’t quietly erode all your hard work.
Always remember, when considering investing, a diverse portfolio across different asset classes, industries and regions can manage risk, smooth returns and help you stay ahead of inflation.
How Chip can help fight inflation
While you should bear in mind that past performance doesn’t guarantee future results, we make it easy to invest in a range of funds that not only outperform inflation, but can offer returns far beyond it.
With options like the FTSE All World, S&P 500 and more, bought to you by big names like BlackRock and Vanguard, you can keep your goals on track and leave inflation in the rear view mirror.
Head to the ‘Invest’ tab in your Chip app and see how you could put your money to work today.
Important to know: When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than your original investment.