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A guide to helping your clients with the rising cost of living

Inflation and the rising cost of living: let us help you, help them

A guide to helping your clients with the rising cost of living

Inflation and the rising cost of living are beginning to hit hard, after successive shocks to the UK economy including our exit from the EU single market in January 2021, as well as supply chain issues created by Covid-19.

Wholesale gas prices too have begun to rise following tensions in Eastern Europe, which has pushed up prices on petrol forecourts and in household bills.  

The end result is that inflation, measured by the retail price index has begun to rise, reaching 5.5% in January 2022 and up again to 5.6% in February.

Whilst the Bank of England expects this to settle in the latter part of the year, it is predicting inflation to rise to 7% in spring 2022. 

The Bank of England target inflation rate is 2%, so to try and neutralise these price rises, it has begun to slowly activate the most powerful monetary policy lever at its disposal – interest rates. These have begun to slowly rise after years of remaining at record low rates, hitting hardest those who have a negative household balance of payments.

Borrowers do better in times of low interest rates and will certainly want to reassess their options as rates begin to rise. 

Throw into the mixture the upcoming national insurance rate hikes and people will soon be facing increased financial pressure. 

These rising costs and slowly climbing interest rates will present a combination of worry and anxiety for some clients and opportunities for others.

Indeed, different sectors will feel the effects of these rises in a diverse number of ways and we’re here to help you help your clients navigate these uncertain times. 


Time for financial advice 

In times of fluctuating markets and economic conditions, financial advisers come into their own. This is the time to step forward and be proactive in the advice you offer.

Existing clients will want to know how changes might affect their current financial products. There’s also an opportunity to approach new leads to offer a guiding financial light in the storm. 



Rises in interest rates often prove a positive development for savers, particularly for those whose savings accounts are linked to or track the base rate.

Banks do not always pass on the increased interest rates to savers and, in fact often defer their own rate increases until a while after the Bank of England base rate changes. 

Talking to clients about their savings opportunities in an evolving economic landscape will also kick-start conversations around their entire portfolio. 



With the Bank of England moving from record lows to small, incremental increases in the base rate of interest, now may be the time to advise your clients on investing. It is unlikely that the Bank of England will reduce rates again once the current inflationary pressures pass.  

With energy prices soaring, investment in energy-linked funds could be a consideration for some investors looking at updating their portfolio. BP and Shell for example both posted substantial profits for the previous financial year.  

In such times, commodities and metals often show potential as a less fragile option for investors as does investing in companies that consume raw materials. 

In times of market instability, investors have historically reduced long-term bond exposure and rerouted funds into short and medium-term bonds.

Another commonly used strategy is bond laddering. This allows bonds to mature at different intervals, with gains reinvested at potentially higher rates. Some may opt to pair this with government-backed, low-risk saving such as premium bonds to spread bets and weather the storm. 

The important thing is to begin a conversation with clients, ensuring that you capture their worries and issues in order to find solutions. 



In the 14 years since the global economic recession of 2008, financial services companies have become far more risk averse in their mortgage qualification criteria.

Loan-to-value considerations and customer resilience to increased rates have taken primacy, meaning mortgage holders are more likely to be able to weather economic wobbles than previously.  

That said, there is an opportunity for financial advisers to talk to clients to ensure they have the right mortgage product for their current circumstances.  

Those on variable rate or tracker mortgages may want to move to a fixed-rate product for example. 



Pensions are by their very nature long-term, low-risk investments that should be well protected from market turbulence. Therefore, it is crucial that advisers make contact with pension clients to ensure that they are not exposed to market conditions. 

Check your clients are aware of the full range of pension products and the options available to them for moving things around.

Index-linked annuities for example, over level annuities, might be preferred – your clients pension pots may increase as cost rise, rather than losing purchasing power. 


Tips on retaining your clients 

  • Ensure you keep on top of the various government schemes devised to buffer clients from the worst of the effects. For example, new support for consumer energy bills may help some. 

  • Contact is crucial. Things move quickly in finance and timely advice can make all the difference. Whatever your chosen communication method, be it email, direct mail or by phone, start getting in touch with clients and potential clients to see how you can help. 

  • Tone of voice. Try not to panic clients and remember that you are the experienced adviser needed to guide them through this period. A calm and measured approach, presenting opportunities in a strategic way, should work well. 

  • Take the time to truly listen to and understand your clients. If you know what excites them or keeps them up at night, you’ll be best placed to offer the right financial solutions. 

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About the author
Kate Morgan
Kate Morgan
Kate has written for leading publications and blue chip companies over the last 20 years.

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