Hurrah! Pensions going up by 3%

Malthusian

By 2030, with pension costs unaffordable but cuts to benefits politically unthinkable, the Government will have switched to a new inflation measure for all pension increases using the following basket of goods:

• 2 gigabytes of computer RAM
• 2005-vintage Nissan Micra
• 1kg packet of couscous
• Two days' rental of Flashdance DVD (non Blu Ray)
• T-shirt from Peacocks
• 10-year life insurance policy for 30-year-old man (standard rates)
• Second hand Mouse Trap board game from car boot sale (diver missing)

You heard it here first.

The_Doc

As the government raises business rates by RPI (which is 3.9%), they gain too. And businesses lose out.

OldMusicGuy

Malthusian wrote: »

• 2 gigabytes of computer RAM
• 2005-vintage Nissan Micra
• 1kg packet of couscous
• Two days' rental of Flashdance DVD (non Blu Ray)
• T-shirt from Peacocks
• 10-year life insurance policy for 30-year-old man (standard rates)
• Second hand Mouse Trap board game from car boot sale (diver missing)

That sounds just like my planned expenditure once I retire next year.....:rotfl: (minus the life insurance of course, won't need that)

But I'm gutted that the diver is still missing from Mouse Trap!

OldMusicGuy

parcival wrote: »

Have to disagree - my personal inflation rate is close to zero. As a retired person I have time to shop around. Car and household insurances are unchanged this year. Phone and Broadband is less due to haggling.
Also shop carefully for food as I know the prices of everything I need. Get wine on multibuys etc........
I would say that most sensible retired people have never been better off.

Agree totally. I don't believe in "inflation" as such when it is at such low rates. Apart from council tax, everything else can be managed by shopping around/adjusting lifestyle/doing it yourself. Even council tax can be managed to some degree by downsizing or moving.

However, if inflation ever gets back to the rates we saw in the 70s that will be a different environment altogether.

dunroving

brewerdave wrote: »

As a pensioner with no mortgage, I keep an updated spreadsheet of my actual outgoings - over the last 12 months my personal rate of inflation is over 6% thanks to council tax,utilities and various insurance and car costs!!:(

Insurance seems to be a law unto itself, when it comes to increasing the annual cost.

Malthusian

My car insurance went down significantly over the last five years - in fact I was surprised at how much when I looked at my personal accounts. I'm in my thirties but I'm pretty sure I'd already maxed out no claims bonus at the beginning of that period.

But if you shop in Aldi one year and Waitrose the next then obviously your personal inflation rate is going to be very high, and the same is true if you don't shop around when your renewal comes in.

Linton

I have detailed records going back at least 10 years. Comparing 2007/2008 with 2016/2017 total expenditure on council tax, utilities, food, telephones, internet, insurance, car maintenance and tax, clothing, dentist, optician and minor incidental cash purchases has increased on average about 1%/year. CPI has increased by over 2%/year. The effects of inflation are swamped by the year-to-year variability.

There have been no attempt to reduce our standard of living. Many costs are pretty constant and areas where costs have increased significantly such as food have been offset by technology improvements elsewhere. Mobile broadband has dropped in price massively. Car maintenance is down to a very small figure thanks to a new car. Energy usage was reduced by the purchase of a modern boiler and use of LED or other low energy lighting.

I suspect that the use of RPI for annual wage and benefit increases in past decades contributed significantly to inflation.