Inflation

QrizB

PennyForThem_2 said:

The NHS pension increased by 0.5% last year.  As did many PA pensions including the state pension.  Not long before this increase erodes the value.  The  value won't keep up in proportion with the final salary equivalent on the day retired IMHO.

The April 2021 increase was equal to September 2020 CPI, 0.5%

The April 2022 increase will be equal to September 2021 CPI, 3.1%

The April 2023 increase will depend on the September 2022 rate of CPI. CPI has already risen 2.4% from September to December 2021 and it's only been three months; the whole-year rate could be 7% or more. We won't know until September.

DairyQueen

Savvy_Sue said:

Sterlingtimes said:

Savvy_Sue said:

Sterlingtimes said:

It may be that the pensioner who is an owner-occupier without a mortgage may be able to struggle along with CPI rather than RPI. Additionally, a non-working pensioner will not be burdened by increased National Insurance. However, it may be that the pensioner being at home all day may be disproportionately hit by increasing home energy price increases.

I thought working pensions (over SPA) didn't have to pay NI any more?

Sorry, I ought to have been clearer. For those earning over the threshold when NI kicks in – currently £9,568 a year – there will be a 1.25 percentage point levy on earnings over that sum.

Yes, but not for those still working while claiming SP. Your mention of non-working pensioners not paying the increased NI had me worried, because I'm anticipating claiming my SP before I stop working!

From The Guardian:
 
"Designed to pay for the NHS and social care, the tax overhaul will result in about 1.3 million working pensioners over the age of 65 paying national insurance (NI) contributions on their earnings for the first time.

For those earning over the threshold when NI kicks in – currently £9,568 a year – there will be a 1.25 percentage point levy on earnings over that sum. The change is expected to affect more than 10% of pensioners over the age of 65 and still in employment."

I understand that this will apply for working pensioners from Apr 2023. 

Savvy_Sue

:-( 

Missed that. 

So from April this year, I'll be paying the extra NI.

Then I'll stop paying any once my State Pension kicks in.

Then from April 2023 I'll be paying NI again, until I actually give up work?

Confusing or what! Hope our payroll software copes with it ....

PennyForThem_2

If you are a working pensioner I really don't see why you should NOT pay NI.  

Savvy_Sue

PennyForThem_2 said:

If you are a working pensioner I really don't see why you should NOT pay NI.  

Well nor do I, as it happens. 

But having fairly recently picked up that I wouldn't need to pay it, I now find I'm in a stop and restart situation. Probably ...

Sterlingtimes

The Daily Telegraph below provides indicative inflation consequences. The annual figures for workers are not well justified so they are really no more than indicative:

Mortgage +£948
Rail +£132
Petrol +£182
Energy +£620 *
National Insurance +£631  
Council Tax +£81 *
Clothing and food +£182 *

Required earnings growth 8.7%

I think that non-working pensions will be hit most by my stared items.

Sterlingtimes

I have a family home for a family of four adults. Up to the end of March, I calculate that I will have spent £1,610 on electricity and gas. My projection moving forward is £3,748. The increase is 233%.

A few days ago, my State Pension fell due: £7,376 a year.

So my home energy cost as a proportion of my State Pension will be £3,748/£7,376 * 100 = 50.80%.

I think that we can be pretty sure that the CPI of 3.1% does not reflect the home energy price increase.

QrizB

Sterlingtimes said:

I have a family home for a family of four adults. Up to the end of March, I calculate that I will have spent £1,610 on electricity and gas. My projection moving forward is £3,748. The increase is 233%.

Might be better discussed on the "Energy" forum, but if that's your forecast you're a high user and/or you've chosen an expensive fixed-rate tariff.

Sterlingtimes

QrizB said:

Sterlingtimes said:

I have a family home for a family of four adults. Up to the end of March, I calculate that I will have spent £1,610 on electricity and gas. My projection moving forward is £3,748. The increase is 233%.

Might be better discussed on the "Energy" forum, but if that's your forecast you're a high user and/or you've chosen an expensive fixed-rate tariff.

I was thinking about how inflation affects older people.

My mother is a case in point. She is 93 years old and lives in a one-bedroom, council tax B, apartment. She uses electricity generously. Most of her 5,942 kWh is nighttime Economy 7. She has been paying E.ON £910.77 a year. She gets £300 Winter Fuel Payment so her net expense is £610.77 a year.

From April, E.ON will charge £1,289.61. She will get Winter Fuel Payment, £300, £150 council Tax Discount and £200 loan bringing her net expense to £639.61.

Her actual percentage increase is £639.61/£610.77 = 4.72%

In this circumstance, she is pretty well protected until the next nasty surprise kicks in.

arnoldy

Clowance said:

nhs workers got 1% for the last several years and are not likely to get this mythical 8,7pc. Obviously the government feel they are not worth it!

Yes but they get "service increments" which are unheard of in the private sector, and on top of that overtime and shift premiums  that would often be expected in small private sector businesses. Add on that the fully index linked pension and excellent job security and most of us are a little perplexed with the constant whinging - especially when 600,000 of the 1 million NHS are not even front line. The main people we feel deserve more are the cleaners and health care assistants - hard & dirty jobs they get on with - usually without complaining. They are those are who we clapped for, along with supermarket workers, bus drivers, street cleaners, etc