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Cost of living always increasing

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Is it just me or do the big things like rent and bills always rise AT LEAST by inflation but usually higher. And wages or benefits for those who can't work rise by inflation if you're lucky but often not at all. So the real spending power of ordinary people goes down and down each year.

Added to that RPI is often used for housing and bill inflationary calculations and CPI for rent or state benefits. RPI is always higher than CPI as a measure of inflation. By a lot. 

When house prices or interest rates increase, rent increases. When the opposite happens, does rent decrease? Haha no chance. 

Anyone else notice this? I guess we can minimise the effect in a lot of ways. Just doesn't seem fair at all. 

Comments

  • HouseTargaryen
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    Sorry I meant CPI for wages and state benefits, not housing. In fact for housing it's often not by inflation but an "inflation formula" which is something like "RPI+1%". 
  • JJ_Egan
    JJ_Egan Posts: 20,281 Forumite
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    Its decimalization what has put prices up and up /
    Fair since when has life been fair . Though its more fair for us than many struggling to survive .
  • MattMattMattUK
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    Costs rise in monetary terms but in actual cost terms they do not or get cheaper for a lot of things. Food for example is cheaper than at any time in history, even healthy food like meat and vegetables are considerably cheaper than 10/20/50/100 years ago. Mobile phones, other technology, cars, travel, clothes, furniture etc. are cheaper than ever before. Home energy costs are cheaper than at most other points in history. 

    The only really significant rise in costs has been housing, which has been a huge increase in some parts of the country, although not as significant in other parts. In some parts of the country the housing cost as percentage of the average salary has doubled in the last fifty years, although it had fallen over the previous fifty years and the quality of housing had increased overall (pre-WWII slum housing was both more expensive in percentage terms and of considerably lower quality). 

    Psychologically, costs always seem to be rising as the price increases and so we see a higher unit price as more, even though the actual cost is likely not higher and may well even be lower. However on many senses, it is just an illustration.
  • dinglebert
    dinglebert Posts: 1,226 Forumite
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    In the 70's it was not unusual for families to be spending something like 30% of their income on food.  Nowadays it is probably about 10%.  Since we generally eat more that could imply that the cost of food has fallen significantly or that pay has outstripped the cost of living.  However there are many other factors at pay including prioritisation.

    50 years ago there was usually one wage earner, now it is common for both adults to be out working.  Years ago food and housing accounted for a significant portion of take home pay with a single foreign holiday been seen very much as a luxury. Today leisure, cars and holidays take a much more prominent place and slice of family income.  Family holidays, separate his and hers holidays, child minders, large houses etc. etc. were all once the perogative of the super rich - now they are the norm.

    Having lived in both the 70's and today, I much prefer todays society and the work life balance.  The cost of living does increase but then usually pay increases more, especially for anyone with ambition.

    Your figures while correct in that people now spend less on food are out somewhat.

    According to Insitute of Fiscal Studies it was 25% in the 1970s on food and 15% in 2010 which is the latest I can find from them.  Others have a similar spread.  However, housing costs are up 25% in that time frame.as is motoring by 25%.  The interesting one to me and it does tie in directly is that leisure costs have doubled.
  • MattMattMattUK
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    dinglebert said:
     The interesting one to me and it does tie in directly is that leisure costs have doubled.
    Leisure costs have not doubled, expenditure on leisure activities has doubled.
  • Murphybear
    Murphybear Posts: 7,390 Forumite
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    We have just received our letter about next years rent for our over 60s HA house.  This includes the maintenance charges.  I am pleased to report that it is £2 less per week than this years  :)
  • luvchocolate
    luvchocolate Posts: 3,281 Forumite
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    That is brilliant, mine went down by 1% each year over the past 3 years ...I think to come in line with council properties. We are on track so so expect a small increase this year, which is fair enough
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