After years of very low rates, savers are earning a meaningful return on cash again. It’s tempting to hold more of it. Our view is that cash has a clear role, but it’s rarely the whole answer.
Where cash makes sense
- An emergency fund that covers several months of spending
- Money you know you’ll need in the next year or two
- A buffer for retirees, so investments aren’t sold at a bad time
Where it can hold you back
Over longer periods, inflation can erode the real value of cash. For money you won’t need for many years, a diversified portfolio has historically had more chance of keeping pace, though with more ups and downs along the way.
The right amount of cash is a planning decision, not a market call.
What we’re doing
We’re reviewing cash levels with each client as part of their regular review, and making sure each pot has a clear job. Past performance isn’t a guide to the future, and the value of investments can fall as well as rise.
Last reviewed 8th October 2026. This is for general information only and isn’t personal financial advice. Tax rules can change, and how they apply depends on your circumstances. The value of investments can go down as well as up, so you could get back less than you put in.
