Savers you've never had it so good?

Palm_Centro

Why is it flawed? And why does your professional status matter?

gozomark

LesU wrote: »

The point I was making was that for a lot of people the transaction is 2 way. A house sale and a house purchase. So are they better off or evens if house prices go down?
Is this reflected in the RPI, or does the RPI only look at the purchase side of the deal? In fact, does the RPI look at all housing prices or just new sales?
I'm interested because that must be a major influence on the RPI at the moment. Are pensioners going to get a zero rise in pensions because their house has decreased in value?

the arguments you give are some of the reasons for the switch to targetting CPI rather than RPI. Why weren't pensions switched ? One reason is that over time, RPI tends to average 0.5% higher than CPI (hence why the target on RPI was 2.5%, and on CPI 2%), and so doing against RPI is actually more generous over time.

As for what RPI looks at
http://www.statistics.gov.uk/articles/nojournal/cpi_basket_article_2008.pdf

Housing

Rent
Private furnished rent
Private unfurnished rent
Local authority rent
Registered Social Landlord (RSL) rent

Mortgage Interest
Average interest payments (estimated/modelled)

Depreciation
Depreciation costs proxy (price index for houses purchased with a mortgage)

Council Tax
Average council tax bills for households in Great Britain

Average rates bills in Northern Ireland

RPI doesn't look at house prices directly, but at average interest payments, so as house prices fall, new mortgages become cheaper.

northernstar5

MiserlyMartin wrote: »

To be fair, to the person talking about Icelandic banks, those who had more than 50K did lose money, as did those in Kaupthing Isle of Man.

All KE personal depositors got all their money back - eventually - including mony over £50000

Masomnia

No Icesave customers lost out, the money in ISAs even retained its tax-free status, and those with Kaupthing Edge were just transferred to ING.

I take your point about Isle of Man customers, but then to the best of my knowledge Martin Lewis never advocated that account.

Anyway, this is all off topic.

Just_landed

Hi I have been followed this thread from about 15 minutes after Martin

started it and the general conclusion is that inflation is low. Today I received my water rates bill for 2009 /2010 and it has gone up 7% inflation is high not low. Just wait COUNCIL TAX next. :mad:

gozomark

well if all you spend your money on is water and council tax, then you are right, your personal inflation is high. Both are included in RPI, so obviously other things are going down......

Nomad25

Oh please, thought the Martin/Iceland/Kaupthing had been done to death.

There are other threads on these specific topics elsewhere on the forum if you want to comment, so please do not go



here.

RayWolfe

gozomark, I so admire your stamina. Well done, but as I posted near the beginning, there are none so blind as those that don't want to see.

uih039

RayWolfe wrote: »

gozomark, I so admire your stamina. Well done, but as I posted near the beginning, there are none so blind as those that don't want to see.

I agree. I gave up some time ago. If people refuse to accept simple arithmetical logic then there is no point continuing to try and convince them.

Dee_Gee

how will we be affected by the government printing millions to put extra money into the economy? am i right to feel nervous? could we end up like Zimbabwe?