UK inflation eased for a third month in a row in January, with CPI falling 0.6% for the month.

Annualised inflation slowed to 10.1% from 10.5% in December.

The Office for National Statistics (ONS), which publishes the CPI data, said the drop was largely due to a drop in the price of fuel and other transport costs.

Les Cameron, savings expert at M&G Wealth, said advisers need to ensure that their clients remained focused on long term Financial Planning rather than becoming fixated on the shorter-term.

He said: “At times like these with inflation levels still high, and with 45% of UK adults worried about the impact, according to M&G Wealth’s Retirement Revisited Report, there can be a tendency to prioritise shorter-term spending needs over longer-term Financial Planning."

Other financial advisers said that it was too early to celebrate the drop in inflation as prices were expected to continue to rise, putting pressure on clients’ finances for a while yet.

Richard Ollive, senior financial adviser at Wesleyan, said: “It may feel like we’ve turned a corner, but it’s critical to remember that prices aren’t going to start falling – they are going to keep rising, just not as quickly.

"Pressure on budgets will still be painfully tight, especially if people’s pay packets haven’t grown as quickly as their bills. And there is still every chance of another interest rate rise in the near future, which could heap more pressure on finances.

“We see our customers facing the challenge of funding this higher cost of living while also doing what they can to keep their long-term Financial Plans on track. Banks are dragging their heels in passing on interest rate rises, so we recommend that anyone who is able to put some money aside should make it work as hard as possible and keeping pace with inflation. Starting, or growing, investments will be important here – giving money the strongest possible chance of achieving real-term growth.”

Wesleyan surveyed 2,000 UK adults and found that a quarter (24%) of those surveyed plan on dipping into their savings or pensions in order to make ends meet this year.

Dan Boardman-Weston, CEO at BRI Wealth Management, said the Bank of England remains in a tricky spot, with a challenge to reduce inflation without causing too much economic difficulty.

He said: “The rate of inflation continues to run at multi-decade highs, with the primary drivers of inflation being gas and electricity bills and food prices. The Bank of England remains in a really tricky spot, as they need to raise rates given that inflation is far in excess of their 2% target but the economy is in a poor state and flirting with a recession. Inflation will continue to decelerate over the coming months due to falling demand, increased supply and base effects taking hold but it will take some time to reach the 2% target.

“The Government and Bank of England have a difficult balancing act ahead of them and hopefully will be successful in reducing inflation without causing too much economic pain. This looks like a big ask though.”

Financial Planners are also not immune to rising costs.

Jonny Black, strategic director at Abrdn Adviser, said: “The rate of inflation has now dipped for a third month in a row, which indicates the pressure experienced by households and businesses should continue to ease this year.

“However, while the rate of inflation is falling, this still merely shows that prices are rising more slowly than they were before. Like businesses across the economy, advice firms are battling cost increases in everything from labour to energy and our own research found that 85% of financial advisers are worried about rising overhead costs over the next half-year.”