Erosion of savings by inflation

RG2015

If the interest I earn on my savings is less than inflation the effective value of my capital will be falling. The ONS has several measures of inflation but none will accurately reflect my personal spending patterns.

Does anyone have any ideas of how I might calculate my personal inflation rate and hence determine my true level of capital erosion?

I am also able to mitigate my inflation rate by using Tesco Clubcard Plus which is reducing my regular Supermarket spend by about 7% net.

Thrugelmir

Create a basket of products/services that you use frequently and track the price movement. 

Gary1984

https://www.rathbones.com/personal-inflation-calculator

EDIT: As per RG2015's post below, this calculator is using data at least 2 years out of date. 

Username999

Gary1984 said:

https://www.rathbones.com/personal-inflation-calculator

Useful, mine is 2.6%.

Gary1984

Please note, this is just something that came up in a Google search so I've no idea how up to date their data is. 

Hopingforthesimplelife

Thanks yep that is a useful link - quickly done with rough and ready figures mine is 3.2% (noted with your caveat above).

RG2015

Gary1984 said:

Please note, this is just something that came up in a Google search so I've no idea how up to date their data is. 

Thanks @Gary1984

This is the sort of thing I was looking for and I have come out at 4.3% which is 1.3% above CPI according to their results page.

However the last time CPI was 3% is January 2018 as per the link below. I find it easier to choose the table option rather than the chart.

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/d7g7/mm23

So I would infer that the Rathbones inflation data is almost two and a half years out of date. Not to be deterred though, I can use their basic template to construct my own analysis as per @Thrugelmir 's suggestion.

My expenditure patterns are reasonably consistent (lockdown notwithstanding) so I should be able to compare like with like. I could also use annualised monthly or quarterly figures to start with rather than sticking to annual data.

masonic

I've tended to go with the simple option (if you have the data) of looking at total spending over the years, with a few anomalous items filtered out. This captures lifestyle inflation as well as price inflation.

Sea_Shell

masonic said:

I've tended to go with the simple option (if you have the data) of looking at total spending over the years, with a few anomalous items filtered out. This captures lifestyle inflation as well as price inflation.

There is also the factor of some things you have to spend on and those you choose to spend on.   

So how inflation effects you depends on what level of price rise you're willing to accept on those items you choose to buy.

How expensive does a Costa Coffee have to get before people go, no, not having one, if they are a regular purchase?

Swipe

Gary1984 said:

https://www.rathbones.com/personal-inflation-calculator

Considering I only filled in about 6 fields it came out at 4.3% which can't be right. My main cost is shopping (which seems cheaper than ever at Lidl, apart from my 5 or 6 bottles of craft ale at the weekend) and insurance which completely skewed the results. My car insurance has stayed about the £180-190 mark and house insurance has gone up from about £212 to £250 because I had a claim.

george4064

My personal inflation figure calculated was 4.3%. Interesting, but I doubt the accuracy and relevance of it.