The Bank of England released an exciting New polymer 50 pound banknotes, Will start circulating on Wednesday. In terms of currency, I worry that they may be as useful as chocolate teapots.

Don’t get me wrong-I have always admired the rich crimson hue of a £50 note, especially if it happens to fall off a Christmas card. But they are increasingly difficult to consume.

Even before the coronavirus scared bars and shopkeepers across the country to refuse cash payments, it would be difficult to drop 50 pounds unless the staff could check the authenticity with a special pen or UV machine.

The new design featuring Alan Turing is a fitting tribute-the Enigma password cracker will celebrate his 109th birthday on the day of launch, which also happens during Pride Month. But I want to know how Turing would treat the following problems?

Although the use of cash has Plummeted 35% During the pandemic, there has never been so many banknotes in circulation-equivalent to Approximately £80 billion, According to the Bank of England. In terms of value, all those cute but unaffordable £50 accounted for nearly a quarter of it.

Why is this number so high? Black economy, tax evasion and other forms of criminal activities are often blamed. Regardless of the criminal intent, hoarding cash is an intensifying trend of the pandemic (perhaps unintentionally, because it suddenly becomes harder to spend money).

If you are the kind of person who hides cash under a mattress, the recent surge in inflation will erode its value.

After being withdrawn during World War II, the £50 note was reintroduced in 1981 (you may remember the design featuring St. Paul’s Cathedral and Sir Christopher Wren).

Sarah Coles, a personal finance analyst at Hargreaves Lansdown, said that if you hid one of the banknotes 40 years ago, inflation has now destroyed more than three-quarters of its purchasing power (£38.46).

She said that if you invested £50 in 1981, its value may now be closer to £2,300 (make some basic growth assumptions).

Even depositing one in a savings account is worth it—in the early 1980s, the interest rate was 14%.

Inflation rose higher than expected last week To 2.1% This means that there is no savings account or long-term savings bond in the UK, and your cash will not flow backwards.

How much cash should you hold?

Your age and risk appetite will help determine the answer, but the standard recommendation is a few months of living expenses, or if you are withdrawing a pension, one to three years of retirement income. This will allow you to weather any bumps in the market and avoid exhausting your pot too quickly.

When assessing how big your emergency fund needs, make the most of Basic budget And trying to predict your future spending needs will also help (considering factors such as holidays, if we allow them again, house improvements and future life events).

Don’t confuse holding cash for emergencies with other forms of financial protection.I am happy to pay the premium monthly Critical illness insurance, Because it will give the biggest upset to our family’s financial situation.

Holding too much cash may be considered irrational by investment experts, but it is also gratifying. I may have more cash than I should, but when the pandemic first hit, it prevented me from selling stocks at the bottom of the market (experts call it “passing the 3am test”).

Where do you hold it?

For cash savers, the minimum interest rate is a big problem-and it has been for some time.

No matter how trivial today’s “best buy” rates may seem, they are many times higher than the 0.01% paid by most UK current accounts.

according to Moneyfacts.co.uk, Building societies and alternative banks provide the best “easy access” interest rates-but the best deals will never last long.

The Yorkshire Architectural Association pays 0.65% for its current member Loyalty Six Access Saver, but the Principality, Leeds and Coventry Architectural Associations all cost between 0.23% and 0.25%.

The interest rates of Atom, Charter Savings and ICICI Bank are all around 0.5%.

If you are going to lock your funds in savings bonds for five years, then the best interest rate is about 1.5%.

High-quality bonds It is still one of the best choices for taxpayers with high tax rates. The chances of winning the prize may have fallen (now roughly equivalent to 1% interest rate, I am worried that it may be further reduced in the future), but if you win the prize, the prize is tax-free.

I once had one Last month’s text Say that I won £50 in the May draw. For a moment I thought I won the lottery.

Adults in the UK can hold up to £50,000 in bonds, and if you need cash, they can be easily liquidated (provided that the national savings and investment website is functioning properly).

They are a useful short-term residence for storing cash you know you will need in the future, whether it’s saving money to pay your tax bills-or in my case, the cash I need to extend my apartment lease.

Other NS&I savings accounts have lower interest rates, but provide protection of up to £2 million (well above the standard £85,000 financial services compensation plan interest rate) and have been used by friends who have sold properties but have not yet purchased new properties.

Should you invest more?

Only if you are happy to take the money for 5-10 years. An emergency fund means that if the market falls, you don’t need to be a “forced seller”-but you should still be prepared for the emotional impact of a market crash.

Think carefully about your long-term strategy before the trough, write down what you are going to do, and come back to think about it when you take the test.

Also consider the most tax-favorable investment path-such as paying more pensions to enjoy tax relief, or Stocks and shares Isa This will protect you from dividend taxes, capital gains and income taxes on future withdrawals.

Even if you deposit your money in cash Isa (currently the best interest rate for conventional savings products is 1.45%), at least it is in the tax-free package and can be transferred to investment Isa in the future.

However, be wary of investing in “cash park” facilities in Isas, or choosing a cash fund in your pension, because you usually pay some kind of fee for these “investments.”

Despite the lowest interest rates, our emotional attachment to cash shows no signs of declining. In turbulent times, its charm is even stronger. Just make sure you figure out exactly what your cash needs are—and how to best implement them.

Claer Barrett is the consumer editor of the Financial Times: [email protected]; Twitter @Clarbu; Instagram @Clarbu