How to inflation proof your savings?

Singapore has experienced notable fluctuations in its inflation rate over the past few years. In August 2022², the Consumer Price Index (CPI-All Items) rose to 7.5% year-on-year, up from 7.0% in July, marking the fastest rise in consumer prices since June 2008. This surge was driven by higher costs in private transport, services, and food, with food prices alone increasing by 6.4% year-on-year. 

Fast forward to 2025, inflation has moderated significantly. As of August 2025³, headline inflation stood at 0.5% year-on-year, down from 0.6% in July, and core inflation (excluding private transport and accommodation) eased to 0.3%, the lowest since early 2021.

Despite this recent cooling, food prices remain elevated, with a 1.1% year-on-year increase in August 2025, indicating persistent cost pressures in essential goods. Even with lower inflation today, the cumulative impact of past inflationary spikes continues to erode purchasing power. Simply leaving your money in a savings account may not be enough to keep pace with rising costs over time.

This underscores the importance of exploring strategies to protect your wealth against inflation, especially in a dynamic economic environment like Singapore's. Fortunately, there are various financial tools and investment options available that can help you safeguard your purchasing power.

3 ways to protect your savings from inflation 

1. Look for a savings account with high interest rates  

A regular bank savings account has its merits, one of which is being accessible to your money whenever you need it. To counter inflation, banks have been coming up with savings accounts with competitive interest rates. 

2. Work your savings harder 

Apart from regular bank savings accounts, you can explore different insurance savings plans that grow with you and adapt to your evolving financial goals. Planning for your future in an uncertain economy requires an insurance plan that builds your funds while pursing your life goals.

For example,  Manulife InvestReady (III), allows you to enjoy flexible premium payment options and maximise your growth potential with added bonuses and access to a diverse selection of funds, alongside the option of additional protection against life’s uncertainties.. 

3. Start investing  

While time still yours to shape, investing early allows you to take calculated risks, benefit from long-term compounding and potentially build wealth. There are many types of investment products available, so it is important to consider the following questions⁴

• What are the product’s benefits, risks, limitations and transaction costs?
• What is the maximum you can lose in the worst case, and how might this happen?
• Will this product complement, supplement or replace your existing investments?
• Will you become over-exposed to a particular risk if your portfolio is not sufficiently diversified?

Those who are looking for both investment and insurance components can consider Investment-Linked Policies (ILPs). Find out what are Investment-Linked Policies and if they are suitable for you. 

Inflation is a fact of life - to do nothing is to look at your purchasing power being taken away from you over the years. Start building your financial future today—small steps now can lead to big rewards later. Speak to us today to find out how you can inflation proof your savings. 

Footnotes:

1. https://dollarsandsense.sg/guide-50-30-20-budget-rule-save-long-term/

2. https://www.mti.gov.sg/-/media/MTI/Newsroom/Press-Releases/2022/09/Consumer-Price-Developments-in-August-2022.pdf

3. https://tradingeconomics.com/singapore/food-inflation

4. https://www.moneysense.gov.sg/investments/types-of-investments/

Important notes

Manulife InvestReady (III) and its supplementary benefits are underwritten by Manulife (Singapore) Pte. Ltd. (Reg. No. 198002116D). This advertisement has not been reviewed by the Monetary Authority of Singapore. Buying a life insurance policy is a long-term commitment. There may be high costs involved if you terminate the policy early, and your policy's surrender value (if any) may be zero or less than the total premiums paid. Your investments are subject to investment risks, and you may lose the principal amount invested. The performance of the InvestReady Fund(s) is not guaranteed. The unit prices and any income accruing to it may fall as well as rise. The Fund Managers shall have the absolute discretion to determine whether a distribution is to be made in respect of the InvestReady Fund(s) as well as the rate and frequency of distributions to be made. The intention of the Fund Managers to make the distribution and the distribution yield for the InvestReady Fund(s) is not guaranteed, and the Fund Managers may review the distribution policy depending on prevailing market conditions. Distributions may be made out of income, net capital gains and/or capital. Past distribution yields and payments are not necessarily indicative of future distribution yields and payments. Any payment of distributions by the InvestReady Fund(s) may result in an immediate decrease in the net asset value per unit. You should read the prospectus and the product highlights sheet and seek financial advice before deciding whether to purchase units in the InvestReady Fund(s). A copy of the prospectus and the product highlights sheet can be obtained from Manulife's appointed distributor.

This advertisement is for your information only and does not consider your specific investment objectives, financial situation or needs. It is not a contract of insurance and is not intended as an offer or recommendation to purchase the plan. You can find the full terms and conditions, details, and exclusions for the mentioned insurance product(s) in the policy contract. This brochure is also available in Chinese. If there are any differences between the English and Chinese versions of this brochure, the English version will apply.

This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the LIA or SDIC websites (www.lia.org.sg or www.sdic.org.sg).

We recommend that you seek advice from a Manulife Financial Consultant or our Appointed Distributors before making a commitment to purchase a policy.

Information is correct as at 14 September 2025.