Try your hand at investing
While it may not be a short-term option, investing in equities over the long term is often deemed to be the most reliable method of gaining above-inflation returns on your money over a sustained period. Of course, this should only be considered if you understand the risk - and the costs - involved.
Martin Bamford, managing director at independent financial adviser Informed Choice, said: "The best way to guard against price inflation is to invest in asset-backed investments. This includes equities and property, which both have the prospect of delivering 'real' returns, over and above the rate of inflation.
"Of course this is often a difficult decision to make for savers as it means exposing cash to investment risk. It is only something people should be prepared to do if they are happy with keeping money invested for the longer term."
Clive Martin, investment director at Lorica Wealth Management, suggests that inflation-beating returns may be bought with investment in index-linked gilts, which have income and final redemption linked to inflation and can therefore safeguard your income and your capital if used appropriately.
Martin added: "Historically equity markets have more than compensated investors in times of high inflation and are a good defence to stop the erosion of your capital.
"However, this type of investment does come with a twist in the tail: you must have sufficient funds to be able - and willing - to take the risk of the investment. Equity markets are not a one-way street and their value can fall, sometimes very significantly."
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How to get inflation-beating savings
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