Inflation returns to UK and could cost hundreds of pounds per month

[lol-lol]

2 hours ago, Sad555 said:

Back in the early eighties  I had a mortgage that had increased to 15% ,young child and only one income with no thought of savings or investment😀but we came out the other end eventually and was free of it before I got a pension at 60 and retired a few years later BUT I’ve known lots of people who were not so lucky and never got to retire and enjoy the fruits of their and their spouses labour it doesn’t matter sometimes how careful you might be in you planning you never know what’s around the corner,anyway enough of this doom and gloom and back to the gardening and my investment🍺

 

 

The early and mid eighties, whilst fair bit or political turmoil in the UK ie miners strike 2, but I recall a few peaks of inflation which I think those even under 40 years old may not be aware that interest rates were ever up well over 5% and linked with that that period in the early nineties of negative equity in houses due to the dramatic fall of around a third in house values.

 

Some international finance experts would say UK households make themselves vulnerable by tending to go for shorter fixed rate mortgage deal ie the 2 years instead of the 5 and even 10 and longer households in the US and mainland Europe go for to protect themselves against these periodic mega peaks in inflation like we had in 1980 and 1990 under the Con governments of the time.

 

Only got a few years left on my mortgage even though I have £100k still to pay off but my concern is for my kids so they do not fall in to nightmare than my brother, sister and I fell in to in the nineties ie go for the longest mortgage deal even if it is a few tenths of a percent higher rate and looks less attractive.  

 

 

 

[lol-lol]

1 hour ago, skomaz said:

The bottom line to protecting yourself from inflation is to live within your means and only buy what you actually need and not what you or others think or tell you you need.

 

We, society in general, need to ensure we consume some goods so their a jobs, such as buying electric cars, as we need to tackle climate change or building more wind turbines and battery storage in my opinion.

 

Much of the rise in inflation is due to oil doubling and tripling in value in the past months and if we were using more EVs we would be less vulnerable to oil price rises.  UK has a relatively low EV subsidy but lots more off shore wind potential which could change the percentage that petrol is part of the average basket of spending making up our outgoings.

 

So more EV subsidy help please from UK government and companies in their schemes.     

 

[KenONeill]

3 hours ago, WolfyWesty said:

I've always found Spoons is reasonable for what it is.

And what it is is "cheap and adequate", with enough variety to keep most large groups supplied with a round or 2 of something OK.

[KenONeill]

7 minutes ago, lol-lol said:

UK has a relatively low EV subsidy

No it doesn't, considering the numbers of us who can't actually afford a Scalextric car, even is they could meet our use case.

[skomaz]

1 hour ago, lol-lol said:

 

We, society in general, need to ensure we consume some goods so their a jobs, such as buying electric cars, as we need to tackle climate change or building more wind turbines and battery storage in my opinion.

 

Much of the rise in inflation is due to oil doubling and tripling in value in the past months and if we were using more EVs we would be less vulnerable to oil price rises.  UK has a relatively low EV subsidy but lots more off shore wind potential which could change the percentage that petrol is part of the average basket of spending making up our outgoings.

 

So more EV subsidy help please from UK government and companies in their schemes.     

 

 

Did you not read my last post??

 

By all means you can spend what you like  - you could even spend some of what you put in your pension and walk your talk...   I believe you've been talking about buying a Zoe for a few years now.  

 

Me - I'll protect myself from inflation by not spending on stuff that is currently way too expensive compared to the alternative and has little demonstrable evidence of environmental benefits when considering whole life cradle to grave (including mining and recycling)

[Ootohere]

@KenONeillOdd you keep talking in various threads about Scelextric cars when they were often needing the brushes replaced and would fly off the track.

 

There are Used Electric Vehicles are not that expensive these days, or ones to rent / subscribe for and servicing and running costs can be really quite low.

For those that can take advantage of the tax breaks as business users, & using Work Place charging, low cost or free charging or even good home charging tariffs they can be very affordable if not an actual money saver allowing them more disposable income to spend on other stuff.

[edbostan]

15 hours ago, lol-lol said:

 

 

What scares me is how pensions (not including if the UK government State pension maybe?) can actually be eroded by inflation.

 

Civil Service pensions are now linked to CPI rather than RPI and when I look at pension projection on my main private pension it shows the low and eve the mid case the money in that pension would be falling in real terms if the UK stock market, combined with certain other UK, national and international gilts, would also be losing real value.

 

It is a real dark corner of our UK society that our UK pensions can be really poverty stricken, is it not quoted that the UK has the lowest pension in Euro next to Malta ?

 

 

I am on the old pension scheme as I was born prior to July 1951. Wifey is on the New Osborne Pension Scheme and gets £100 a month more than me. That is a huge amount and to some is a choice between heating and eating

[Sad555]

Your lucky.             To have such a young wife😀

[lol-lol]

14 hours ago, KenONeill said:

No it doesn't, considering the numbers of us who can't actually afford a Scalextric car, even is they could meet our use case.

 

Are you referring to just the initial buying or the leasing cost as when one factors in the cost of doing the miles with the fuel costs, and I have heard servicing is also cheaper in an EV, I would think, in normal times when one might be doing say 1k miles a month, then what appears to be an unattractive initial buy price of an EV that over say 4 or 5 years, with that fuel cost factored in, the difference would either be much close or actually in the favour of the EV.

 

The Scottish government appears more generous that the English in terms of EV loans and cheaper or free EV charging compared to paying £70 or so for each tankful of dinosaur fuel which is bringing on these climate change issues which sadly are filling the news ie record temperatures in N America and floods in Europe etc.  

 

[lol-lol]

3 hours ago, edbostan said:

I am on the old pension scheme as I was born prior to July 1951. Wifey is on the New Osborne Pension Scheme and gets £100 a month more than me. That is a huge amount and to some is a choice between heating and eating

 

Is that the primary State Scheme rather than a Civil Service scheme ?  

 

One of the newspapers was saying that pensioners were in for an 8% rise due to the Covid quirk how it affected the Triple Lock.

 

With those on Universal Credit about to get the £20 a week taken away but inflation starting to gallop a way the whole state benefit and finances are in focus and concern and that is without even considering the cut in the UK overseas aid budget where a relatively small amount of money is reported to going to cause such hardship. Sad times.  

 

[PetrolDave]

2 hours ago, lol-lol said:

One of the newspapers was saying that pensioners were in for an 8% rise due to the Covid quirk how it affected the Triple Lock.

... and all the other newspapers are saying that both Rishi & Boris are dropping very strong hints that the triple lock will be dropped (temporarily?) to be 'fair to all'.

[lol-lol]

3 minutes ago, PetrolDave said:

... and all the other newspapers are saying that both Rishi & Boris are dropping very strong hints that the triple lock will be dropped (temporarily?) to be 'fair to all'.

 

Indeed, it was the quirk of the Triple Lock pension calculation that is due to deliver pensioner the 8% and Boris and Co breaking this historic promise is quite an action especially as it is seen as benefiting a large part of their core vote ie the blue rinse brigade, we shall see and I imagine much of the blue rinse have strong private pensions that supplement their state pension so it will the poorer tat will suffer most that live exclusively or mostly on the State pension, no change there then. 

[PetrolDave]

34 minutes ago, lol-lol said:

I imagine much of the blue rinse have strong private pensions that supplement their state pension so it will the poorer tat will suffer most that live exclusively or mostly on the State pension, no change there then. 

Sadly half of the people I know have only the state pension, they are saying that if the Tories break their election promise to keep the triple lock they won't be voting Tory again. If that is reflected more widely then that's a significant proportion of the older voters lost at the next general election.

 

Personally I would like the triple lock to remain as I draw my state pension in August 2022 so I would benefit from the 8% rise.

[lol-lol]

16 hours ago, skomaz said:

 

Did you not read my last post??

 

By all means you can spend what you like  - you could even spend some of what you put in your pension and walk your talk...   I believe you've been talking about buying a Zoe for a few years now.  

 

Me - I'll protect myself from inflation by not spending on stuff that is currently way too expensive compared to the alternative and has little demonstrable evidence of environmental benefits when considering whole life cradle to grave (including mining and recycling)

 

Oh yes as I recall I was going to point out that we all take risks and where you say you only buy what you can afford then you would have never had a mortgage as that is always a gamble that you can keep on working and at a similar salary that you have when you take the mortgage out.  One might not take out the max about ie twice once wages perhaps instead of three time which means less risk but still risk you are taking n'est pas ?

 

The Zoe, 52 KWh version, particularly in 135 hp guise, is quite something. I really want something with a much bigger boot or an estate and it does worry me the range is 250 miles though I see some hypermilers have just nearly doubled that on a single charge https://www.retailgroup.co.uk/renault/news/renault-zoe-sets-a-new-hypermiling-record

 

If we break  or vastly reduce, our reliance of oil we will reduce the effect oil has in inflation which is currently huge.

 

I am more drawn to the MG 5 EV estate at the moment and their is a new version of that coming out soon with similar range to the Zoe but it depends if I am still working and getting my car allowance with fuel card from my employer and whilst we should be more focused on carbon reduction etc I am sure Covid and for us BREXIT, PPE and covid testing equipment delivery as been priority in sorting out the few of us with fuel cards.  Whilst I am sure electricity costs make up part of inflation too it appears that electricity is getting cheaper and cheaper due to offshore wind going on line where as petrol has got 30% more expensive in the last couple of years it seems to me here. 

 

My company has a 1 billion Euro division in Lithium MP battery tech and produce such batteries.  I gather several thousands batteries we had in our EVs were found homes in electricity storage banks which we use here but sned many to Africa so they can have power all through the night when solar is no generating, keeps medicines cool etc so they battery packs can have lives of more than a decade, perhaps even 2 decades as I gather they are still used even if the power capacity drops below 90% or even 80% they are still very useful.  ICE cars will struggle to meet EUR7 and EVs will continue to fall in price in real terms.  I am sue that having a mix of petrol and an EV will make me less vulnerable to inflation at a personal level, just need companies to offer subsidising my home charging electricity use instead of giving me a fuel card.

 

 

[lol-lol]

10 minutes ago, PetrolDave said:

Sadly half of the people I know have only the state pension, they are saying that if the Tories break their election promise to keep the triple lock they won't be voting Tory again. If that is reflected more widely then that's a significant proportion of the older voters lost at the next general election.

 

Personally I would like the triple lock to remain as I draw my state pension in August 2022 so I would benefit from the 8% rise.

 

Your first para is music to my ears.  Whether one is civil service, health, police, teaching and now the pensioners it is only a matter of time before this government betrays one.  I would say Bojo's team is not even Conservative and to hear ex Con leaders stand up and slag Boris off one can define the current government as popularist pandering party in a similar vein to trump and Bolsonaro.  Which is my worry as even though the Con party of the nineties did very little to stop inflation going large which led to house prices falling by a third.

 

I am due to get my State pension in 2027 I think but get my Civil Service pension starting in 12 days.  At least the spike in CPI will help that grow faster than I though it would a few months ago.  Sine the UK pension is so relatively poor to other countries I think we should let the 8% go through but then a government that looks to save a couple of billion on oversea aid which will led to misery for millions is not such a surprise.

 

I suppose we have to look to balance the books else the international lenders will ask a higher interest rate as we lose further levels of credit rating down from AA after we already lost our AAA rating a few years ago.  Inflation can be a spiral and one has to choose which sectors bear the pain. I would rather see our nuclear subs go and maybe HS2 be modified rather than some of these other choices.

 

[skomaz]

So after all that waffle...   None of the car and fuel costs matter to you as you have a car allowance and fuel card...   And you actually want the triple lock 8% pension rise as you'll benefit personally...   Socialist my arse!

 

The only sensible thing you've said in all that guff above is the bit about HS2...

[@Lee]

19 minutes ago, skomaz said:

So after all that waffle...   None of the car and fuel costs matter to you as you have a car allowance and fuel card...   And you actually want the triple lock 8% pension rise as you'll benefit personally...   Socialist my arse!

 

The only sensible thing you've said in all that guff above is the bit about HS2...

It's clear you have some problem with @lol-lolso why not either 
a) Ignore him or;

b) Ignore his topics

[lol-lol]

14 hours ago, skomaz said:

So after all that waffle...   None of the car and fuel costs matter to you as you have a car allowance and fuel card...   And you actually want the triple lock 8% pension rise as you'll benefit personally...   Socialist my arse!

 

The only sensible thing you've said in all that guff above is the bit about HS2...

 

Of course it matters as I do not want my employer giving me benefits that are both inefficient financially and also harm the environment when there is possibly an alternative that does much less harm to Mother Earth.

 

Drop the Fuel card and replace it with a subsidy for my Home Charging and Use of Public Charging network.  

 

Instead of giving me thousands a year for a car through salary run a proper company car scheme and get me an EV where I could quite easily have a Long Range Model 3 and there is no business tax on company car EVs, win all around except UK government tax receipts but it is their scheme so it presumably is what they want people to do.    

https://www.gov.uk/calculate-tax-on-company-cars

 

As I said, the less people that use oil the less of a spike in our UK inflation numbers as oil is such a big part of our inflation basket of elements making up that composite figure.

Us UK wind energy to drive around the UK and not oil imported from Saudi, Iran, Russia etc and line their pockets with our money. 

 

[lol-lol]

Good to see the BBC is on the same wavelength as me both on the reality of inflation return and one of the main causes ie oil/petrol.....

https://www.bbc.co.uk/programmes/w3ct2dgz

 

Good article on this fundamental change to the way we have been living for the past few years ie zero inflation...   50 minute radio broadcast.

 

Some of the world’s biggest economies are starting to see the return of inflation after a long period of low prices and low interest rates. Central bankers seem pretty calm so far, but some economists are getting jittery. We’ll find out why prices are rising and what can be done to steady the global economic ship. As the EU announces dramatic plans to curb climate change we ask what more financial institutions can do to play their part.

Edited 19 July, 2021 by lol-lol

[edbostan]

On 17/07/2021 at 10:22, Sad555 said:

Your lucky.             To have such a young wife😀

If only. She was born in 1953 so only 3 years my junior. Twenty years is the ideal age gap.

[lol-lol]

38 minutes ago, edbostan said:

If only. She was born in 1953 so only 3 years my junior. Twenty years is the ideal age gap.

 

My dear old Dad reckoned 5 years so one retires together but that does not apply anymore.  

 

Marrying with a go few years a part is not good if/when gets divorced, unless one has a pre-nuptial I suppose, as divorce does not take account of how much earning potential one has, it is just straight down the middle.

 

Inflation becomes a much smaller concern if/when divorce cleans out whole swathes of ones coffers and one has to start replanning again for retirement and hedging against inflation.

Potentially state pension and those nailled to inflation like public secondary pension schemes may fair better than private pensions for a change ?

 

 

 

[Sad555]

Just done a quick calculation,8% on the oap will equate to about another 7.035 pints a week in weatherspoons😀

[lol-lol]

57 minutes ago, Sad555 said:

Just done a quick calculation,8% on the oap will equate to about another 7.035 pints a week in weatherspoons😀

 

Also a efficient way of giving the money back quickly to the government with all that Excise Duty and VAT !  Spirits are probably even more efficient though !

[EnterName]

Logically, if you're certain of approaching inflation, then borrowing money to purchase an appreciating asset seems the sensible thing to do.

The dream of a housing price crash is just a fantasy enjoyed by a number of renters, who look forward to the glorious day when their landlord will have the property they rent out to the tenant repossessed and the tenant guy buy it from the landlord for next to nothing.

 

So if I wasn't a lazy git and I was sure of approaching inflation, I'd borrow up to the max, buy a suitable freehold property and convert it for multiple occupancy rental and rent it out.

The net result would be the rights to a property (the value of which may rise or fall, I don't care) while high inflation would reduce the real-world cost of repaying the money I borrowed to buy the property, while simultaneously pushing up the rent, which would increase in line with inflation.

 

(Of course, if higher interest rates accompanied the high inflation, then things might get quite exciting.)

[lol-lol]

27 minutes ago, EnterName said:

Logically, if you're certain of approaching inflation, then borrowing money to purchase an appreciating asset seems the sensible thing to do.

The dream of a housing price crash is just a fantasy enjoyed by a number of renters, who look forward to the glorious day when their landlord will have the property they rent out to the tenant repossessed and the tenant guy buy it from the landlord for next to nothing.

 

So if I wasn't a lazy git and I was sure of approaching inflation, I'd borrow up to the max, buy a suitable freehold property and convert it for multiple occupancy rental and rent it out.

The net result would be the rights to a property (the value of which may rise or fall, I don't care) while high inflation would reduce the real-world cost of repaying the money I borrowed to buy the property, while simultaneously pushing up the rent, which would increase in line with inflation.

 

(Of course, if higher interest rates accompanied the high inflation, then things might get quite exciting.)

 

Nearly all assets have been falling over the last few days and some are considering gold as a haven for a while.

I still like international bonds and as the pound has fallen about 5% in the last week these bonds do well as they are an inverse.

Happy to accept next to no interest rate of increase just to be not in equity too much.

I am still floundering to identify safe havens.  I

 

My caravan in Devon has done quite well.

BREXIT work also a huge new market doing the customs work there and that helped earnings, turnover which will continue to lead to inflation beating pay rises though clearly those customs charges from and to Europe is adding substantially to inflation.