It might feel safe to keep your money in a savings account or under the proverbial mattress. After all, cash is accessible, predictable, and risk-free—right? While that may be true in the short term, holding too much cash over the long term can quietly erode your wealth, thanks to one powerful force: inflation.

Inflation refers to the gradual increase in the price of goods and services over time. As inflation rises, the purchasing power of your money decreases. In other words, the same £100 that buys a full weekly food shop today may only buy a half your shop ten years from now. Even at a modest inflation rate of 2–3% annually, the real value of your savings can shrink significantly over time.

This is where the hidden danger of holding too much cash lies. While your money might appear to be safe sitting in a bank account, it’s actually losing value each year if it’s not growing at a rate that keeps up with or exceeds inflation. Traditional savings accounts and even many fixed-term deposits typically offer interest rates that fall below the inflation rate—meaning you’re effectively earning a negative real return.

To protect and grow your wealth over the long term, investing in a diverse range of assets is a far more effective strategy. Investments such as stocks, bonds, property, and even certain alternative assets have the potential to outpace inflation and generate real growth. While these assets come with varying levels of risk, they also offer the possibility of higher returns—especially over longer periods where short-term volatility tends to even out.

The stock market, for example, has historically delivered average annual returns that outpace inflation by a wide margin over decades. Property appreciates in value and can generate rental income. Bonds, especially those that adjust for inflation, can offer more stability while still delivering better returns than cash. Diversifying your investments across asset classes reduces risk while giving your money multiple ways to grow.

Of course, the key is to match your investments with your time horizon. Cash still plays an important role in your financial plan—for short-term needs, emergency funds, and liquidity. But for money you don’t need for five, ten, or twenty years, letting it sit in cash is more harmful than helpful.

Don’t let your hard-earned savings shrink while sitting idle. Make your money work for you—today and into the future.

The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.

Alternative Assets invest in assets that are high risk and can be difficult to sell. The value of the investment and the income from it can fall as well as rise and investors may not get back what they originally invested, even taking into account the tax benefits.