Did Your Savings Account Lose Money in 2018

11 Min Read
Last Updated March 16th 2021

Once upon a time, it might have been possible to make a bit of money using a savings account for a rainy day, your kids, retirement, or maybe that round the world trip you dreamed of.

To get that money, you could have put it in a savings account. Here your money could work for you, building interest over time, maybe even for years to come. Many people still do this, many blindly advise it without quite understanding how it works.

Sure, it does sound like a great idea. But, unfortunately, it doesn’t always work out. In fact, did you know that in 2018 in the UK, the average return on a savings account was 1.18% while the average rate of inflation for the same year was 2.48%? Probably not.

Do you know what this means? Well, basically, on average, most people with a savings account are actually losing money!

Here’s a nice little example to make it clear to you:

If the average return on your savings account was 1.18%, that would mean that for every £1 you have you will make £0.0118 on top. So, if you had £1,000, at the end of the year, you would have made £11.80 on top.

Sounds reasonable, right?

Well, here’s how inflation is screwing up your profit. Because inflation was 2.48% for the same period of time, that means that the buying power of your money dropped by 2.48% or, in other words, things got more expensive, the average basket of goods this year is 2.48% more expensive this year than it was last year.

That 2.48% increase not only wipes off the buying power of our savings, but it also decreases its value by 2.48%.

Which means that your £1,000 would actually decline in value by £13, equalling £987.

Your money is actually worth less at the end of the year than it was at the beginning!

The exact opposite of what a savings account is supposed to do. You may as well have kept it in a standard account.

Similar problems can also be seen in 2017, where inflation was actually higher at 3.58%, and don’t think this issue only takes place in the UK!

Of course, if your return is higher than the rate of inflation then great, but if it’s not, maybe it’s time to think about an alternative.

And, even if your return is higher than the rate of inflation, what about next year? And the year after that?

People need to become their own money managers. Don’t let the bankers handle your money for you, learn to handle it yourself and you will increase your chances of making a real profit.

Now you are probably wondering what is the best alternative to a savings account? Well, we have a great option for you: forex.

A lot of people are starting to learn how to trade forex

how to trade forex

What is forex trading you ask?

Well, forex, or at least retail forex trading, has become particularly popular in the last decade or so. This is largely down to the advent of the internet.

If you are new to trading, your natural reaction to the word ‘trading’ may make you think of stocks. However, forex has proven that it offers a lot of advantages over more traditional instruments.

Advantages of forex over stocks:

  • More volatile. This may not sound like something positive but it is actually highly beneficial. Because prices are constantly going up and down, it presents numerous opportunities to buy and sell. Stocks do not tend to fluctuate so much.
  • Faster execution. Trading forex can usually be done with better market access. However, this is not always the case and depends on the broker you use.
  • Leverage. Many forex brokers offer leverage which allows traders to trade more than their investment. You cannot leverage stocks.
  • More availability. Forex can be traded between Sunday 5 pm until Friday 4 pm EST, 24 hours a day. Stocks, on the other hand, can only be traded at certain times of the day.

What is the potential?

Well, your potential depends on how much time you are able to put into learning how to trade forex.

But the forex market itself is very, very big. It’s estimated to move as much as $5 trillion per day. That money is moved around by what is known as ‘liquidity’.

Liquidity changes a lot depending on how many variables are affecting the market. One day you could be presented with numerous opportunities to profit, while others you might not.

It’s important to mention here that you shouldn’t get overly excited about the potential profits you could make. This is not a get rich scheme, there shouldn’t be dollar signs in your eyes right now.

So please ignore those suspicious looking ads that pop up trying to convince you to sign up and trade. Especially those that promise you will make money and advertise big wads of cash and attractive women. These are not serious people and may even be scammers.


Why should I learn how to trade forex?

Two reasons: one not to lose money, and two to make money.

But aside from those obvious reasons, forex investing can actually act as a safety net for many people. You don’t have to be someone who is solely motivated by money to be a forex trader.

For many, it's a way to continue making money when you are unable. You could be disabled or unable to work for health reasons or caring for others such as children or elderly parents.

Trading forex can be a lifeline for such people because, unlike a full-time job, you don’t need to invest all your time working. In fact, many of the best traders don’t spend that much time trading at all.

Trading forex may also be the only option for those who can’t work and only have a limited amount of money to last them a set period of time.

For example, people who are living off of their pension may have to budget themselves more than working people, and over time, that pension is only going to get smaller and decline in value. Forex trading is a way to overcome this.

Trading also allows you to make money anywhere, any time as long as you have internet access, of course.

How can I learn to trade?

learn to trade forex

You can learn how to trade forex in a number of different ways, but by far, trading courses for beginners are your best option. They are particularly good for the amount of information you can learn over a period of time.

On top of that, they are usually organised in a logical way, starting from the very beginning and working their way to harder, more complex topics. This way you’re never overwhelmed.

They can also cover difficult topics such as analysis that you are not likely to learn by yourself and, by the end of a trading course, you’ll likely be in a good position to start trading.

Not all courses are great though. There are plenty of courses that are not very educational. And some may only teach you one particular way to trade.

Trading Education are experts on trading and specialise in creating online trading courses. You can check out our free forex trading courses here.


With a good education, you will then be able to take advantage of financial articles. Without a proper education in trading, a lot of the information discussed may go straight over your head.

Online, there are a plethora of articles online for trading forex. The topics they cover are vast, ranging from a traders mentality, technology, and market analysis, to name a few.

However, we should mention that you cannot rely solely on articles. There are plenty of people out there offering false information.

This might be because they have bad intentions, they are poorly informed or it might simply be that the article is old and needs updating.

You can check out our forex articles here.


Practice makes perfect. If you don’t eventually make that big step, it may never happen. It’s like knowing how to drive, but being too afraid to take the car on the streets.

Ideally, though, learn the basics of trading a bit first before starting off small.

Many out there advise signing up to a demo account or a practice trading account first, however, we advise against this because you're not trading in real conditions.

Set appropriate goals and build them steadily over time. The aim is not to make money here but to learn. So losing a small amount of money should not be looked at as a horrible thing but as a chance to find out why you lost money.

If you find yourself overwhelmed by something, it’s probably a sign that you haven’t educated yourself enough on it. If it happens, don’t be afraid to go back and look over what you may have missed.

Practice is best done along-side educating yourself with a great course.

What are the risks?

what are the risks

Honestly, the risks involved in online forex trading are vast and should not be underestimated.

It’s very easy for someone without any experience in forex trading to lose all of their investment and in the worse cases, all that they own.

Many of the risks are actually related to not having the right mindset. Some beginners look at trading as an easy way to get rich. It’s not. It takes a lot of time and a lot of effort, and there is absolutely no guarantee you’ll ever be rich.

The best way to steer clear of these risks is by understanding them and to set yourself boundaries. Knowing when to stop is vital.

Make sure you understand risk management before starting to trade!

Key points

Here’s what you should take away with you after reading this article:

  • There are better ways to save money than a standard savings account. A savings account could even mean losing money if you’re not careful!
  • People need to take more control of their finances. They cannot allow themselves to become passive when it comes to their savings.
  • There are many ways to learn how to trade, but an education in trading is the best option. Our free trading course is an excellent choice!
  • Forex trading has plenty of potential. But don’t expect to instantly become a millionaire!
  • There are many risks associated with trading. Understand them before you start trading!

How to manage the risks and stand the best chance of making money?

That one’s easy: Get educated! (Yeah, we repeat that a lot don’t we? - That’s because it’s true!)

By learning how the forex market works and the risks involved in trading, you can avoid making devastating mistakes and, hopefully, turn a profit.

Now here’s your chance to get currency trading education. We at Trading Education are offering our £2,500 The Ultimate Guide To Forex Trading completely free.

How do you get it?

Open a trading account with one of our partner brokers and send your account number to [email protected]. We’ll then send you our free forex education course.

Topics include:

  • The foundations of forex trading
  • Setting up charting software
  • The mechanics of forex trading
  • Advanced analysis
  • Strategy in forex

Click here for more information on our free course.

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