UK savers are holding over £60bn in cash for long-term savings and investments, which stands to be eroded by £1.5bn this year as a result of higher inflation.
The Consumer Prices Index measure of inflation has fallen for the first time this year, with the figure dipping by 0.3 percentage points to 2.6 per cent in June.
CPI inflation - which was at 0.5 per cent in June 2016 - has generally strengthened over 2017.
According to Blackrock's calculations, inflation has eroded the UK's savings by £760m so far this year. If inflation were to continue at the 2017 average (2.4 per cent), another £760m could be lost between now and the end of the year.
BlackRock’s Investor Pulse survey, which polled 4,000 people in the UK, found savers typically have £8,700 in cash, of which a quarter (£2,270) is set aside for long-term savings and investments. Of this pot, by Blackrock's estimation they stand to lose £55 this year as a result of inflation.
Three quarters of people polled predict inflation is set to rise further in the next 12 months.
Inflation compounded over 20 years would see the £2,270 pot Brits have set aside for long-term savings and investments depleted by over a third (£870) per person, amounting to over £20bn based on a CPI annual inflation rate of 2.43 per cent.
Jeremy Roberts, head of UK retail sales at BlackRock, said: “It is encouraging to see that over a quarter of Brits’ savings has been earmarked for long-term savings and investment.
"This is outside of money set aside for monthly expenses, upcoming events and emergencies.
"However, there is still an emotional barrier that stops us from taking the leap out of cash and into investing.
"If UK savers had invested their £2,270 pot of cash in the FTSE All Share over the last 20 years, it would be worth £8,350 today. Even if they were to have invested a quarter of their pot in the FTSE All Share, they would still be £1,525 better off."
Tom Selby, senior policy analyst at investment platform AJ Bell said anyone who has money in an account which pays less than inflation must ask themselves whether they are happy accepting a real-terms loss.
"If the answer is no, they might want to consider taking some extra investment risk in order to at least give themselves a chance of maintaining their spending power.
"Of course the value of investments can go down as well as up, so it's important anyone considering going down this route is fully aware of the risks and comfortable riding the undulations of stockmarket investing."
Chris Daems, director at Cervello Financial Planning, added: "When an individual is considering their financial goals it's important to consider the level of growth required to achieve these goals.
"These goals also need to take into account the impact of inflation and the danger of holding too much in cash is they aren't offsetting this inflationary risk."
