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Inflation
The gradual rise in prices over time, which erodes the purchasing power of money held in cash.
If inflation runs at 3% and your savings account earns 2%, you are effectively losing 1% of purchasing power per year. This is one of the core reasons to invest rather than simply save.
Example
In 2000, £100 bought roughly the same as £175 does today. Money held in a jar under the bed has quietly become less valuable.
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