18% Inflation - Decimation of savings

subjecttocontract

There is media coverage of the Gov' considering placing a cap on energy prices of £2000pa. It's going to cost £100 billion in Gov' debt if it happens. But, it's gonna seriously lower an 18% inflation forecast.

John464

Yes the Government does seem to be having a change of mind.  Energy companies (who hire MPs) would obviously rather energy was subsidised than we cut our consumption.  But the Government proposes to borrow more money, and through commercial banks (who hire MPs) - adding to taxpayer costs.  How do you assess how much this extra public debt will devalue the £ and add to inflation?

Nebulous2

I don't think the £100 billion subsidy to maintain prices for everyone is a serious starter. A more targeted scheme may well be though.... 

John464

Nebulous2 said:

I don't think the £100 billion subsidy to maintain prices for everyone is a serious starter. A more targeted scheme may well be though.... 

But how can they target it
Many of those struggling are already in work.  Just been reading of a guy doing 2 full time jobs - day shift and night shift and still reliant on the foodbank.
If you could raise benefits to cover the cost of living you create the situation where the unemployed are better off than people in work.

DannyCarey

Does make you wonder if overpaying on a mortgage is worth it if tied into a longer term fix... 

sevenhills

The Government need to let energy prices increase, not stop them rising. Prices need to increase to reduce demand, there may not be enough to go around. There could be shortages.
Higher prices will also encourage green alternatives, which is good for the environment. We could see schemes for more solar, on new houses and old.

Albermarle

John464 said:

Nebulous2 said:

I don't think the £100 billion subsidy to maintain prices for everyone is a serious starter. A more targeted scheme may well be though.... 

But how can they target it
Many of those struggling are already in work.  Just been reading of a guy doing 2 full time jobs - day shift and night shift and still behind in his rent.
If you raise benefits to the cost of living you create the situation where the unemployed are better off than people in work.

This always the dilemma. It is relatively easy to target the very needy, and to exclude the better off. However how to deal with the working poor/just managing/ families on higher benefits etc  without introducing artificial cliff edges, that may disincentivise working. it happens already even without any targeted energy subsidy.

John464

DannyCarey said:

Does make you wonder if overpaying on a mortgage is worth it if tied into a longer term fix... 

But what could you put the money in that guarantees a better return than paying off your mortgage?
(Personally I would rather pay off the mortgage because its not just a financial decision. I would do it for peace of mind)

DannyCarey

sevenhills said:

The Government need to let energy prices increase, not stop them rising. Prices need to increase to reduce demand, there may not be enough to go around. There could be shortages.
Higher prices will also encourage green alternatives, which is good for the environment. We could see schemes for more solar, on new houses and old.

Unless you live in a tree house, that is not an option - everyone needs energy!  Electricity and heat are things we cannot go without. 

The UK government should own these things via nationalisation, we also need nuclear energy. 

DannyCarey

John464 said:

DannyCarey said:

Does make you wonder if overpaying on a mortgage is worth it if tied into a longer term fix... 

But what could you put the money in that guarantees a better return than paying off your mortgage?
(Personally I would rather pay off the mortgage because its not just a financial decision. I would do it for peace of mind)

I do agree, I overpay every month diligently, but I am fixed less than 2% to 2025... I will try to keep it going, although is it still wise to do if you (kind of) plan on upsizing in 4/5 years?