There is no such thing as risk-free savings.

Put it under the mattress and it can get stolen or burned in a fire. Remember, most household policies only cover a small amout of cash in the house - often £250.

There is still a risk that smaller Building Socities could succumb to economic downturn, so do not exceed the £50,000 covered by the Government compensation scheme in any one society.

Also, don't forget that cash on deposit will not keep pace with inflation, especially if you are paying tax on the interest. Always make sure you have utilised your Individual Savings Account allowance (now £5,100 for the over 50s) to get tax-free interest.

For longer-term savings, investment in asssets such as property and shares is the only true hedge against inflation.

I believe that if we are fortunate to have some money to save then we should save in mutual organisations like building societies and credit unions. These organisations do not have shareholders and are owned by their members. They may not have the best interest rates at the moment but are more likely to have their customers interest at heart.