Cash has been an easy asset class to ignore for a long period of time. Between 2008 and 2021, we’ve seen rates at low levels, causing advisers and clients to forget about cash as an important part of their portfolios. From 2022 onwards, a rise in inflation has driven an increase in the base rate. The base rate at 5.25% today, is about 50 times where it was in 2021.
This shift comes with a general market expectation that rates will stay higher for longer. Current market forecasts for the end of 2027 suggest that the base rate will remain at a minimum of 4%. In this financial environment, it’s important for savers to ensure that their cash is not only mitigating the impact of inflation, but is also earning the best return, all while benefitting from FSCS protection.
Simon Merchant, Co-Founder and CEO of Flagstone, shares his insights. Watch the full interview.