The UK cost-of-living crisis of 2022-2023 — peak CPI of 11.1% — was the worst in 40 years. In 2026, inflation has moderated significantly, but the price level remains elevated and savers continue to look for ways to preserve purchasing power.
UK inflation in context (2026)
11.1%
CPI peak (October 2022) — 40-year high
~2.5-3%
CPI in 2026 (moderated but above target)
2%
Bank of England inflation target
What's still driving UK prices higher
- Services inflation (wages in hospitality, healthcare, professional services)
- Housing costs — rents still rising faster than CPI in most UK cities
- Energy bills — still above pre-2021 levels despite price cap reductions
- Food — grocery prices remain significantly above 2020 levels
How to protect your money from UK inflation
| Option | Inflation protection | Liquidity |
|---|---|---|
| Easy-access savings (4-5% AER) | Beats 2-3% CPI currently | Immediate |
| Premium Bonds (~4.4% prize rate) | Competitive, tax-free prizes | ~3 days |
| Index-linked NS&I savings (if available) | Direct CPI link | Fixed term |
| Stocks & Shares ISA (global equities) | Historically beats inflation over 10yr+ | High (shares) |
| Cash in current account | Loses to inflation | Immediate |
💡 The real cost of keeping money in a Barclays/HSBC current account
£10,000 in a standard current account at 0.1% AER earns £10/year. In an easy-access savings account at 4.5%, it earns £450/year. At 3% inflation, the current account money loses £290 in real terms annually. The easy-access account nearly breaks even with inflation. The difference is £440/year — just for moving the money.
Track your budget in pounds
CashControlly built for the UK financial reality. 7 days free, no card required.
Start free →Want to actually apply this?
CashControlly helps you turn it into a daily habit. Designed for the UK: Monzo, Starling, ISAs, HMRC and the cost of living.
Start 7-day free trial