What does a spike in inflation mean for retirement saving?

After two months of modest declines, inflation has made an unwelcome return to the headlines. April’s figures show a sharp rise to 3.5% – the biggest monthly jump in more than a year – driven by increased household bills, national insurance changes, and wider economic headwinds.

These latest figures were largely anticipated. Rising water rates, council tax hikes, and a spike in energy costs had already led to April being dubbed “awful.” Yet for Britons, that doesn’t make the impact any easier to bear. With household budgets already stretched and many people already struggling to save, another inflation spike is a harsh reminder that economic recovery is far from complete.

How inflation affects your long-term savings

Put simply, your pension savings need to grow fast enough not just to increase, but to keep pace with rising costs. Rising inflation makes this challenge more complex.

For savers, particularly those approaching retirement, it creates difficult questions. Should you change your contributions? Review your investment strategy? Delay retirement altogether?

While there’s no single right answer, what matters most is staying informed and not making any knee-jerk reactions. Regularly reviewing your pension plan, understanding how it’s performing, and seeking advice can give you some much-needed clarity when economic conditions change.

Why financial clarity matters more than ever

Volatility is inevitable, but confusion doesn’t have to be.

Moments like this underline the importance of taking stock. Reviewing your pension, understanding your risk profile, checking that your plan is still aligned with your goals, and seeking advice could be some of the simple tools you need to help keep you on course for the retirement you want.

And it’s times like these where access to financial education and independent advice can play a big role. When people feel empowered, and have the opportunity, to ask questions and understand their options, they’re more likely to make well-informed decisions that support their long-term financial wellbeing.

Working together to support savers

Businesses, employers, the Government and the wider industry, all have a role to play in making financial guidance more accessible. From improving workplace pension engagement to building trust in the advice market, a joined-up approach is key to helping savers feel supported, especially in unpredictable times.

But for now, individuals shouldn’t be left to shoulder the uncertainty alone.

If you’re unsure how inflation might affect your retirement plans, speaking to a qualified adviser, such as the team at My Pension Expert, could help to provide some clarity, discuss your circumstances and help you to better understand your options.

Clarity builds confidence, and with the right support, you can make decisions that work for you, whatever the economic climate.