Inflation now 3.5% - not good for savers

Rupert_Bear

• Not too worried at moment. Have savings with interest rates at 7.16, 6.00, 5.00 percent.

guitarman001

I have just enough to [ay my student loan enough, 3 years after graduation. Amount is ~£14.5k. I'd be left with nothing, though - right now money is split between cash ISA and Lloyds Vantage account - thinking of investing in shares using iii soon. Hopefully I'd be able to make more with my money than the debt would rise by. It's the cheapest loan around but still a heavy burden.

I thought the loan interest rate was fixed at 0% until August 2010... or does it vary month by month based on RPI etc? Shocking that when it should have been -0.4% they upped it to 0%...

atypical

guitarman001 wrote: »

I thought the loan interest rate was fixed at 0% until August 2010... or does it vary month by month based on RPI etc?

The student loan interest rate is 0% until 31st August 2010. The RPI inflation rate in March (released in April) is used to set the interest rate for the duration of next years loans.

It's not quite as simple as that though. See this earlier post.

amcluesent

Clown has overseen at 20% decline in the £, of course inflation is going to be high and stay-high given we have to import so much. Everything that went wrong under Labour in 1970s economy has come around again, now we get the inflation/stagflation.

Stompa

twizzel wrote: »

The published CPI/RPI % figures are measures for the last 12 months i.e. they are not an indication of what's happenning to prices right now.

Indeed. In fact the monthly CPI index has actually dropped this time round, indicating that prices have fallen in January.

Milarky

Stompa wrote: »

Indeed. In fact the monthly CPI index has actually dropped this time round, indicating that prices have fallen in January.

Prices often fall in January - and July if you examine the figures - it's an expected seasonal drop but is still less than it would usually be.

By the way, when inflation is positive but slowing, that is termed 'disinflation'. When inflation is positive and increasing - that's still inflation. Strange then when price falls actually equate to inflation...

Stompa

Milarky wrote: »

Prices often fall in January - and July if you examine the figures - it's an expected seasonal drop but is still less than it would usually be.

Hmmm, interesting. You have to go back as far as 1990 to find a rise in January, since then it's always been a fall (with a couple of years having no change).

2010

Last years company pension increase which (don`t ask me why) is based on January`s RPI was a massive point one of one per cent 0.01%.

This year 3.7%, may inflation continue to spike every January.

I notice the government base their`s on September`s RPI but have guaranteed 2.5% for this April because it fell short.
BUT the 2.5% is only on BASIC state pension.

sabretoothtigger

Your stingy company got caught out there, no doubt they had done that on purpose aiming to increase the pension by less then annual inflation

ScarletBea

My personal inflation isn't that high, so I'm not worried yet.