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MSE News: Pensioners the winners as inflation stays high

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Former_MSE_Guy
Former_MSE_Guy Posts: 1,650 Forumite
I've been Money Tipped! Newshound! Chutzpah Haggler
This is the discussion thread for the following MSE News Story:

"The RPI inflation measure, currently used to calculate the state pension – stood at 4.6% last month ..."
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  • dunstonh
    dunstonh Posts: 117,068 Forumite
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    MSE News: Pensioners the winners as inflation stays high

    High inflation doesnt help pensioners. Many will have level income from pension annuities or rely too heavy on savings accounts to provide an income (leaving the capital and income subject to inflation risk as many wont use investments).
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Sceptic001
    Sceptic001 Posts: 1,111 Forumite
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    dunstonh wrote: »
    High inflation doesnt help pensioners.
    Indeed. How can it be a "blow" to get a 2.5% increase when prices have fallen, but to be a winner to get a 4.6% increase when prices have risen 4.6%?

    (Incidentally, there is a typo in the article: "the current 0.%" should read "the current 0.5% figure.)
  • margaretclare
    margaretclare Posts: 10,789 Forumite
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    Your article mentions 'the joint pension'.

    There is no such thing as a 'joint pension'!
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • zygurat789
    zygurat789 Posts: 4,263 Forumite
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    Last year the increase was 2.5% when it could have been minus 0.9%, ie an increase of 3.4%. I'm sure Dave would think it fair if the pensioners made up for last years generosity by only getting 1.2% increase this year.
    The only thing that is constant is change.
  • alanq
    alanq Posts: 4,216 Forumite
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    edited 12 October 2010 at 1:13PM
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    If a pensioners' spending matched the pattern of RPI they would not be winners but merely break even with their pension. However, pensioners are likely to spend a greater proportion of their income on fuel, food and clothing (which have gone up) and less on air fares (that have gone down) than the RPI assumes. So pensioners lose.

    The effect of inflation on any savings that they may have will also make them losers.

    So how does high inflation make pensioners "winners"?

    Yet another inappropriate MSE headline that is not supported by the facts or even the information contained within the article itself.

    Update: The title seems to have been amended to "State pension to rise as inflation stays high".
  • margaretclare
    margaretclare Posts: 10,789 Forumite
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    Air fares??? How many people spend on air fares as a regular and repeatable part of their budget? Even if you go on holiday twice a year that hardly compares with grocery shopping that you do every week.

    When on holiday we tend to go by overnight ferry rather than by air. We hate airports!! So, our main spending is on petrol and food. Yes, food is continuing to rise in price. But we're still OK, still managing to save, have just changed the car so paying more in car insurance but less in road fund tax. Clothes - we mostly have enough, don't need any more new clothes.
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • jem16
    jem16 Posts: 19,414 Forumite
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    alanq wrote: »
    Update: The title seems to have been amended to "State pension to rise as inflation stays high".

    Title of the the thread not changed though but then MSE Guy is known for his sensationalism type headlines for threads.
  • Noble_Savage
    Noble_Savage Posts: 137 Forumite
    edited 12 October 2010 at 2:41PM
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    jem16 wrote: »
    Title of the the thread not changed though but then MSE Guy is known for his sensationalism type headlines for threads.

    I'm staying out of it. Last time I tried to correct one of these MSE 'News' stories for inaccuracy/sensationalism (deposit protection 'rocketing' to £85k when the figure hasn't even been agreed yet) I got put back in my box by MSE Dan and even ML himself!
  • hansi
    hansi Posts: 3,001 Forumite
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    I guess this increase only applies to the Basic State Pension. As usual, we'll be conned out of any increase to the SSP!:mad::mad:
  • Loughton_Monkey
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    I have early retired, and am drawing two of my pensions. Other pensions and the state pension will come later.

    I remember back in the 'good old days' of around 1975, when as a mere slip of a lad in the office, we were getting 'cost of living escalators' in our salary every month.

    RPI was peaking at around 26% that year.

    Should we get a return to this scale of inflation, does this mean I should (as a pensioner) be deleriously happy?
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