Last year, global shares crashed, with the once buoyant US stock market falling 20 percent in its worst performance since the financial crisis in 2008, while the tech-focused Nasdaq fell by a third.

Markets have recovered some of their losses this year only to dip again in recent days and Fawad Razaqzada, market analyst at City Index, warned: "Selling momentum is rapidly growing."

Worried investors have been seeking safety in cash as savings rates increased, but this supposed safe haven still leaves their money at the mercy of today’s runaway inflation.

Half of Britons say they have never invested any money in shares and many can’t afford to do so as they battle to cover everyday bills in the cost-of-living crisis.

One in six admit they are simply too scared, according to new research by Shepherds Friendly. Older people are most cautious with less than four in 10 over-55s refusing to invest.

While that is understandable it also leaves them at the mercy of today's inflation which is far higher than the very best savings rate.

New analysis from Standard Life shows the harsh impact of high inflation on cash over time.

It calculates that if a saver deposits £10,000 in a fixed-rate account paying three percent and inflation averaged 10 percent, after two years its purchasing power would have fallen to just £8,593 in real terms.

That’s a staggering £1,407 less.

Cash is supposed to be low risk but in practice it virtually guarantees the value of your money shrinks over time.

Savings rates may have climbed over the last 18 months but they are still no match for inflation.

Prices rose another 8.7 percent in April but essentials are rising much faster, with food bills up 19.1 percent.

Dean Butler, managing director for retail at Standard Life, said today’s best buy savings accounts are still no match for inflation, shrinking the value of the pound in your pocket. “While the Bank of England is predicting inflation rates have peaked, inflation is proving more stubborn than previously predicted.”

People can do all sorts of things to save money such as dumping old direct debits, delaying big-ticket purchases and clearing any debts, but they need their savings to work harder, too. 

"Pensions and stocks and shares Isas a great way of saving tax efficiently, but remember the value of shares can fall as well as rise,” Butler said.

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The FTSE 100 fell more than 1.7 percent on Wednesday over fears that UK interest rates will have to climb even higher to beat inflation, while global markets were rattled by the tense political row over the US debt ceiling.

The index now trades at 7,625, which is a mere 10 percent higher than December 31, 1999, when it closed at 6,930, a record at the time.

Investors have still made money over the last two decades, as most will have invested when the index was at lower levels. They will also have benefited from company dividends, which are forecast to yield 4.2 percent this year.

The FTSE 100 has delivered an average total return of 6.89 percent a year over the last 20 years, with all dividends are reinvested.

That's way better than cash.

But with global stock markets falling in 2022 and struggling so far this year, it's hardly surprising that many investors have lost their nerve.

This is not a good time to lose money in a stock market crash.

Victoria Scholar, head of investment at Interactive Investor, encouraged people to carry on investing. "One of the best times to invest is when sentiment is low like today, as shares are cheaper as a result."

Many won't return until the next bull run makes markets irresistable. Unfortunately, by the time they wake up to the opportunity, the biggest returns will already have been made.

The best way to build long-term wealth is to have a balanced spread of shares, bonds, cash and other assets, and leave them invested through good times and bad.

Over the years, we will see plenty of both.