Nationwide UP 0.6% MoM & UP 0.9% YoY

chucknorris

RenovationMan wrote: »

Clearly you have never heard of economies of scale. A 1% increase in BoE rates would mean a £2500 increase in my mortgage, an additional £208 per month. A 1% increase in our food shop would add an additional £6 per month.

I know which I would rather have. :rotfl:

For the last 3 years we have been living off just the extra income arising from the lower mortgage rate, all other income has being saved.

wotsthat

DervProf wrote: »

Of course, the headline inflation figures don't tell the true story for a majority of people, but that's part of "the plan". Even those who think they are benefiting from low interest rates are slowly losing out. The cost of most essential things seem to be rising, yet their mortgages are not getting cheaper in a majority of cases. For many people, the few hundred pounds they may be saving each month in mortgage interest is being eaten away by inflation. Meanwhile Merv will keep telling us that the BoE have inflation under control, until he retires with ink stained fingers.

So much for being prudent, and saving for my retirement. I still think that I`ve been doing "the right thing", but the government/BoE's actions do make me question my decision.

I don't think I'm benefiting from low interest rates - I know I am - I've worked it out.

Same goes for your comments on being prudent and saving for retirement. I know exactly what you're saying but instead of vaguely thinking that it's the right thing why not work it out? If it turns out you'd be better off by spending all your money now instead of saving then why save?

wotsthat

Graham_Devon wrote: »

Says the man who assumes a wage rise is tax free.

Do try harder.

I'm loathe to do this but MrRee's example is spot on although I'm not sure what canned 'pees' are.

Instead of looking at % increases across different spending categories it's sometimes more enlightening to work it out in pounds and pence.

chucknorris

wotsthat wrote: »

I don't think I'm benefiting from low interest rates - I know I am - I've worked it out.

Same goes for your comments on being prudent and saving for retirement. I know exactly what you're saying but instead of vaguely thinking that it's the right thing why not work it out? If it turns out you'd be better off by spending all your money now instead of saving then why save?

I've only just recently appreciated the advantages of a pension as a hedge against living too long and thus allowing the expenditure of more capital (instead of holding onto it ALL just in case you live much longer than expercted). I am now paying over 28k/year of my salary into a pension.

I hadn't looked too closely at pensions before but after some spreadsheet analysis it was something I thought well worth doing.

DervProf

RenovationMan wrote: »

Clearly you have never heard of economies of scale. A 1% increase in BoE rates would mean a £2500 increase in my mortgage, an additional £208 per month. A 1% increase in our food shop would add an additional £6 per month.

I know which I would rather have. :rotfl:

I have heard of "economies of scale", but I don't usually associate the term with an individual's debt.

You might experience a £208 per month increase in your mortgage, but I suspect that your mortgage is a little larger than what the majority of people have.

And isn't it a little simplistic to compare a 1% increase in food prices with a 1% increase in mortgage rates ?

RenovationMan

wotsthat wrote: »

I don't think I'm benefiting from low interest rates - I know I am - I've worked it out.

Same goes for your comments on being prudent and saving for retirement. I know exactly what you're saying but instead of vaguely thinking that it's the right thing why not work it out? If it turns out you'd be better off by spending all your money now instead of saving then why save?

Perhaps the prudent course of action for retirement planning is to have an element of one's portfolio in property, either in BTL or a large home or indeed within a property fund in a traditional pension framework. Property has been a surprisingly robust investment when compared to other asset classes.

It's no use someone moaning because they invested badly. The pointers were there for a sustained period of low rates, you either stick with the same investments that give zero return or you wise up and move with the market.

After receiving next to no return on our investments and savings, we bought our current large house. We'll quietly pay down the mortgage over the next few years of low rates and then when we retire we will downsize and with the TAX FREE proceeds we'll buy a nice cottage outright and put the remaining equity into whatever asset class is doing well in 25 years time.

DervProf

wotsthat wrote: »

If it turns out you'd be better off by spending all your money now instead of saving then why save?

The car isn't going to last much longer, and the central heating boiler will soon need replacing.

Income is up and down like a yo-yo.

I`ve got all the stuff I need/want, so why spend (then have to borrow to replace the more expensive items when required) ?

chucknorris

RenovationMan wrote: »

Perhaps the prudent course of action for retirement planning is to have an element of one's portfolio in property, either in BTL or a large home or indeed within a property fund in a traditional pension framework. Property has been a surprisingly robust investment when compared to other asset classes.

It's no use someone moaning because they invested badly. The pointers were there for a sustained period of low rates, you either stick with the same investments that give zero return or you wise up and move with the market.

After receiving next to no return on our investments and savings, we bought our current large house. We'll quietly pay down the mortgage over the next few years of low rates and then when we retire we will downsize and with the TAX FREE proceeds we'll buy a nice cottage outright and put the remaining equity into whatever asset class is doing well in 25 years time.

We were going to sell off all our investment property (in about 10 years? depending on the market) but I'm starting to think now that it makes sense to keep some diversity and retain one or two properties.

DervProf

RenovationMan wrote: »

We'll quietly pay down the mortgage over the next few years of low rates and then when we retire we will downsize and with the TAX FREE proceeds we'll buy a nice cottage outright and put the remaining equity into whatever asset class is doing well in 25 years time.

Assuming that the proceeds will be TAX FREE, of course.

25 tears is a long time, and the tax system will almost certainly different to how it is today. Not saying you will be taxed on any profit you may make, but it isn't impossible that a tax could be put on profit from property.

wotsthat

DervProf wrote: »

I`ve got all the stuff I need/want, so why spend (then have to borrow to replace the more expensive items when required) ?

You were questioning the value of saving because you sometimes doubt whether the government and BoE are acting in your best interest.

Sounds like you can see the benefit of saving after all.