Aibu to not worry that my savings aren't inflation proof in this scenario?

[seenthelite]

I inherited a lump sum from my late parents' house sale. I have put it in savings accounts that earn as much interest as possible, though of course the rate is still less than inflation. This is temporary because I intend to use it to pay off my mortage next year when my current fixed rate deal ends. I think that, so long as the interest I'm getting is higher than my current mortgage rate of 1.24% it doesn't really matter that its not beating inflation, because the debt isn't increasing with inflation either. If I were to try and chase a higher rate by putting it into stocks and shares I'd be putting it at big risk in the current volatile market. So I'm making the right call, aren't I?

I think so - don't know much about it but I always thought investments are long term so if you are intending to use the money next year leave it where it is

Or stick it in Premium Bonds, not guarantee of a win (and therefore no 'interest') but you never know!

That's where I'd put money that I needed quick access to for a short period of time.

Correct. I have done this exact same thing. I have a very large mortgage which I fixed for 5 years at 3% per annum just before the mini budget. I have a bunch of excess cash (worth about 20% of my outstanding mortgage), which I have used to buy a 5-year Gilt yielding 4.5% after tax per annum. The effect is as if I had paid my mortgage down now, but with a benefit amounting to the difference between 3% and 4.5%, which is 1.5% p.a. or 7.5% over 5 years of the amount invested in the Gilt. I could earn more than 4.5% per annum if I put the money in stocks and shares, but the 5-year Gilt is risk-free and stocks and shares are not.

If my time horizon were shorter - 1 year, like yours is - it would be a no brainer to put the money in something very low risk like a savings account. You should not be investing in stocks and shares given their volatility.

Yes, you're making the right call in your circumstances.

The one thing that might be worth checking is if it's worth moving any of your current cash savings - DH and I had a couple of fixed term bonds which could be cashed in early with 90 days loss of interest, but the rates available now more than offset that.