Inflation generally adversely impacts household savings. Inflation diminishes the value of savings overtime as the general price level increases the purchasing power of money reduces. It affects fixed income individuals such as those living on pensions. If their income does not increase to be able to cope with the increase in cost of living. The purchasing power of their income declines overtime. Generally inflation discourages long term savings. due to the devaluation of the money as people may save money for future purposes such as building a house or buying a car.