THERE are good reasons why inflation is sometimes known as the ‘silent thief’.

Over longer periods of time it raises the cost of living, which can erode the value of your savings, investments and the income you receive from them.

Understanding how much it will take to provide an income for yourself and potentially a spouse, while also ensuring you are able to leave something behind for your loved ones after your death is key.

Inevitably this depends on a range of factors: primarily how much income you think you will need over the course of your retirement (one which is likely to be much longer than previous generations); and when you want to start winding down your professional life.

That is why the pick-up in inflation this year has been a cause for concern.

Since February this year, the headline rate of Consumer Prices Index (CPI) inflation has been above the two per cent target set by the Bank of England.

CPI unexpectedly eased back in June, falling to 2.6 per cent from the 2.9 per cent rate in May.

This was mainly the result of the decreasing price of fuel and recreation.

It also reflects the fact that one of the main reasons why inflation has picked up strongly over the past year is the weakness of the pound since June 2016’s EU referendum.

If the full impact of the weakening of sterling is now reflected in prices then it is possible that inflation has peaked.

Even if not, the consensus expectation is for CPI inflation to peak in October.

This reflects the fact that the absolute nadir for sterling, on a trade weighted basis, was October 2016.

However, inflation is still much too high for comfort.

If you haven’t already taken steps to protect your investments against inflation you should be considering it.

That means thinking carefully about where you hold your money.

Cash savings can be one of the worst places to leave the bulk of your money if you are serious about preserving its purchasing power.

Currently no savings accounts pay a rate that can beat inflation.

Stocks and shares have tended to provide a better hedge against inflation.

However, due to the level of volatility associated with equities, investors need to understand the risks and be prepared to stay invested for the long term.

There is no one perfect solution that provides guaranteed protection against inflation.

However, a financial adviser should be able to help you structure your portfolio to minimise the damage it can cause.

We can analyse your pensions, savings, investments and property holdings, and work through a range of scenarios to help you make informed decisions based on a real understanding of your options.

The greatest risk to your retirement dream is doing nothing and missing opportunities.

Or acting recklessly and exposing yourself to unnecessary risk by over-relying on a single asset such as property.

Neil McLoram works in business development at wealth management firm Brewin Dolphin, based in Newcastle.

The opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin. No director, representative or employee of Brewin Dolphin accepts liability for any direct or consequential loss arising from the use of this document or its contents. Any tax allowances or thresholds mentioned are based on personal circumstances and current legislation which is subject to change. The information contained in the text is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness. The value of investments can fall and you may get back less than you invested. The information is for illustrative purposes only and is not intended as investment advice.