18% Inflation - Decimation of savings

Albermarle

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)

The OP is paying 1.4% on their mortgage and current savings rates easily beat that. So they would be guaranteed a better rate by saving more money in a fixed rate savings account.
Investing does not guarantee to give a better return but in the long run it should beat inflation, although in the short /medium term anything could happen. Investing via a pension gives you a head start due to the tax relief. 

The question mark is what will the OP's mortgage rate be when they have to refix?

There are numerous threads on this forum about savings vs investing vs mortgage. The answer is usually do some of each.

John464

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.

I think you have a point.
Just throwing more money at the same limited supply to peg prices for consumers can only raise market prices to ever more absurd levels. 
(Which of course suits the foreign energy companies hiring MPs and asking for fuel subsidies) 
Could be better to give people the money and let them choose what to spend it on.

Nebulous2

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 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.

Targeting will always miss somebody, anything they do is a broad brush, but the figures to subsidise everyone, on top of £25 billion ongoing for the state pension, are too high to be accepted by either of the prime ministerial contenders. 

One of the biggest tragedies of our low-wage economy is that a lot of poor people are in work. 

 A simple way is the targeting used for the £150, giving it to the lowest council tax bands. Providing domestic energy relief through a property-based taxation system makes some sense. 

The idea posed in some quarters of GPs prescribing relief doesn't seem at all sensible to me, which probably means it will be used. 

John464

solidpro said:

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.

How overly simplistic and dumb. It's not Nike trainers. Should they put up the price upon delivery of the NHS to stop people using that too?

Well supply and demand is pretty simplistic.
In the case of the NHS services we should be looking at increasing the supply.
(i.e Johnson honouring his promise to 'fix social care' so hospitals are nt clogged up with people fit to discharge if they had somewhere to go)
Increasing the supply of fuel is harder than reducing the demand.
I shall turn my themostat down and put on more layers.
Our politicians might consider using their private jets less etc

John464

DannyCarey said:

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. 

To be fair nobody suggested going without electricity.  Just reducing demand.
But I do agree that our power and water supplies should not have been sold off to private companies (who hire MPs)

Prism

DannyCarey said:

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. 

I doubt it would make any difference. The energy suppliers don't make money from consumers because of the price cap. Currently the price cap is set way below the cost of gas so the energy companies will currently be losing money from us. In general only 1% of the cost of our energy goes to the supplier as profit. I'm not convinced that a publicly owned company would be even that efficient.

sevenhills

Prism said:
 I'm not convinced that a publicly owned company would be even that efficient.

We had non profit making energy companies, White Rose energy and Robin Hood energy, both went bust losing millions. Private energy companies have also gone bust.
I believe Ovo energy is a non profit company, but it's not the cheapest.

subjecttocontract

Targeting can never be exact. Within the current list of benefits the Gov' are including all pensioners for extra payments. Whilst there are obviously many who need help there are also thousands who are relatively well off and should be way down the list of the needy. I don't think there is a low cost method of means testing........otherwise it would have been used in the past.

phillw

DannyCarey said:

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

It depends on whether you think you might have to claim means tested benefits in the future.

MEM62

chelt_Robin said:

I am earn £52K a year and 40 years old.

I have around 35K in a Cash Isa currently paying 1.7%
I have a fixed rate isa with 10K rate of 1% expiring in October
I have cash in a savings acound rate 1.5% C£7K 


Then a stocks and shares Isa with around £12K this is split between a FTSE 100 index tracker currently up around 16% and Vanguard Life Straetgy 60. Currently up about 1.9%.  

You are way too heavily weighted in cash.  At your age you should also have tolerance for a more adventurous portfolio.  My S&S ISA is 100% in equities.