Inflation: the silent tax nobody voted for – and what you can do about it

This article is for educational and informational purposes only. Nothing in it constitutes financial or investment advice. Florin21 is not FCA regulated. Always seek independent professional advice before making any financial decision.

Most people have a nagging sense their money does not stretch as far as it used to. The weekly shop costs more. The energy bill arrives heavier each year. That feeling is not paranoia. It is the lived experience of a real, measurable phenomenon, and the numbers behind it are worse than most people realise.

What inflation actually does to your money

Inflation is a permanent reduction in what your money can buy, year after year, without you doing anything wrong. Cash can sit untouched in a bank account and still lose value while you sleep. Doing nothing is itself a choice with real consequences, and over a working life those consequences compound into something significant.

The compounding problem most people miss

Inflation does not feel too bad at 3% in any given year. It feels like background noise. But the math tells a different story. According to the Office for National Statistics, the pound has lost roughly 43% of its purchasing power since 2009. The same pattern has played out across all the major currencies. UK CPI currently sits at 3.3% (ONS, March 2026). At 3% inflation, purchasing power erodes by 26% over ten years and 36% over fifteen. £100,000 in a savings account today has the real-world buying power of roughly £71,900 a decade from now, assuming inflation does not run hotter.

Who inflation hurts most

The people this hurts most are doing the responsible thing. Savers holding cash earning interest that barely keeps pace with inflation. Retirees on fixed incomes watching the gap between pension and costs widen each year. Business owners holding cash reserves only to find them quietly eroded before they are drawn down. The common thread is uncomfortable: prudence is being penalised.

If you already hold Bitcoin and are concerned about whether your family could access it if something happened to you, that is a separate but equally important question. Our free Bitcoin Inheritance Risk Assessment covers it in two minutes: florin21.com/inheritance-risk-score

Why property is not the simple inflation hedge it appears

In Ireland, the default response has always been property. A second home, a rental flat, a site to build on. Bricks feel real, and the family next door did well from a buy-to-let in the 1990s. But across a 25-year holding period the picture is more complicated than the headline return suggests. Ongoing maintenance, letting agent fees of 8 to 15% of rental income, stamp duty, accountancy fees, insurance, vacancy periods, mortgage interest, rates and capital gains tax on disposal all eat into the return. Property can still make sense as part of a balanced position. It is not, however, the simple, costless hedge against inflation it is sometimes presented as.

How inflation quietly erodes small businesses

For business owners the picture is more direct. Inflation arrives as suppliers quoting more for the same materials, energy bills that have doubled, wage negotiations where staff need a rise just to stand still, rising business rates and insurance premiums. Margins are squeezed from every direction at once. Customers face the same pressures, so passing costs through is rarely clean. Many viable businesses quietly fail over a decade not through bad decisions but through cost inflation outpacing what they can charge.

This is part of why a growing number of UK businesses are now looking at Bitcoin as a treasury reserve asset, following the lead of Strategy (formerly MicroStrategy), which began allocating corporate cash to Bitcoin in August 2020 and today holds 818,334 BTC. UK-listed companies including The Smarter Web Company and BHODL have formally announced Bitcoin treasury allocations, and according to CoinCorner’s 2024 Business Bitcoin Report, 84% of UK businesses currently holding Bitcoin are micro-businesses – construction firms, professional services practices, retailers – not just technology companies.

This is monetary policy, not just crises

It is tempting to treat each spike in inflation as the product of a particular crisis. The 2008 crash, the pandemic, the war in Ukraine, the energy shock. These are genuine accelerants but not the root cause. Crises arrive, the money supply expands in response, prices catch up later, and the pattern repeats. The Bank of England does not target zero inflation, it targets 2%, and that is deliberate policy. Governments have structural incentives to allow moderate inflation because it erodes the real value of accumulated public debt. When you expand the supply of something, the value per unit falls.

The traditional responses and their limits

Property has been covered above. Equities have a long-run track record but bring volatility, fees and dependence on continued earnings growth. Gold has held value for centuries but is difficult to store and transfer. The problem of finding a hard asset that holds value as money loses it is not a new problem.

Why Bitcoin is structurally different

Bitcoin is structurally different in one respect that is directly relevant. Its supply is fixed at 21 million coins. No government or central bank can increase that number. It is the first asset in history with provably finite supply, enforced by mathematics rather than by promise. Inflation is fundamentally a supply problem – too much money chasing the same goods. Bitcoin sits outside that mechanism entirely.

Bitcoin’s volatility, addressed honestly

Bitcoin is also volatile. Anyone who held it in 2018, 2020 or 2022 experienced significant paper losses and genuine stress. But volatility is not a permanent feature – it is a transitional one. As Bitcoin continues toward mass adoption, with institutional investors, listed companies, and sovereign wealth funds entering the market, the historical evidence suggests the extreme price swings are gradually moderating. Learning to understand volatility rather than fear it – and sizing any allocation accordingly – is part of seeing Bitcoin as a serious long-term asset rather than a short-term trade. Business owners already manage volatility daily in energy prices, exchange rates and customer demand. They are not strangers to weighing risk against reward over a long timeframe.

A measured way to think about it

Consider a construction business in Northern Ireland holding £150,000 in a current account as a working capital buffer. At 3.3% inflation that buffer has the real purchasing power of around £107,000 in ten years. A 10% allocation to Bitcoin – £15,000 – deployed gradually over twelve months would have outperformed the entire £150,000 cash position over every comparable ten-year window in Bitcoin’s history, including the windows that contained the worst down years. That is not a guarantee of future performance. It is the historical record.

None of this is a recommendation to sell everything and buy Bitcoin. It is a suggestion that understanding what inflation does to cash over a 10 to 15 year horizon is the first responsible step for any saver, retiree or business owner thinking seriously about protecting purchasing power.

Don’t trust – verify

We built a free Bitcoin Treasury Calculator that shows what a cash position is worth in 5, 10 and 15 years at current inflation rates, and what a Bitcoin allocation could look like alongside it. No sign-up is required to see the inflation figures. GBP, EUR, and USD supported.

florin21.com/bitcoin-treasury-calculator

If you are an individual rather than a business owner and your concern is whether your Bitcoin holdings are properly protected and accessible to your family if something happened to you, our free Bitcoin Inheritance Risk Assessment covers that question in two minutes.

florin21.com/inheritance-risk-score

This post is for informational purposes only and does not constitute financial or investment advice. Florin21 is not FCA regulated.