With Santander slashing one of the best cash account rates from 3% to 1.5%, and inflation starting to edge up as a result of sterling’s devaluation, here are some funds savers could consider.

If you’re searching for higher yield

Inflation is usually the enemy of bonds. Because the income paid by bonds is usually fixed at the time they are issued, high or rising inflation can be a problem as it erodes the real return you receive.

To mitigate this risk, you could go one of two ways: either invest in a fund such as AXA Sterling Credit Short Duration Bond, which only invests in bonds close to maturity, or look for a bond fund paying a high enough yield to provide a cushion. I also like Invesco Perpetual Monthly Income Plus, which has a yield of 5.5% and Premier Multi-Asset Monthly Income, which invests in all asset classes and currently has a 4.7% yield (yields as at 16 August, via FE Analytics).

If you want to inflation-proof your portfolio

Some companies do better than others in inflationary environments. Cash generation and pricing power both provide buffers for a company, enabling it to self-fund its operations and offset rising costs by passing them on to customers. Evenlode Income invests in some such companies. Infrastructure is also a good bet, as toll roads, for example, have prices linked to inflation. You could consider First State Global Listed Infrastructure.

If you want to stick with UK equities

Alternatively, you could just decide to put your faith in the central bank and invest in UK plc. R&M UK Equity Long Term Recovery and Man GLG Undervalued Assets are interesting options. As we start to extricate ourselves from Europe, volatility is likely to increase and there may be plenty of opportunities to invest in good companies that find themselves undervalued by the market and at fire-sale prices.

Darius McDermott is managing director of fund rating agency, FundCalibre, and Chelsea Financial Services