Category Archives: Inflation

Squeeze on wages puts UK on par with Greece

Britain’s households suffered a squeeze on wages in the past eight years only matched in the advanced world by Greece, according to a TUC analysis.

Between 2007 and 2015 wages fell by 10.4 per cent after adjusting for inflation. It was the sharpest decline of all 35 members of the Organisation for Economic Co-operation and Development with the exception of Greece. Across the OECD, real wages increased by 6.7 per cent on average.

British households endured the most severe decline in livings standards in more than a century after the financial crisis and many economists believe they are on the verge of another squeeze following the vote to leave the EU.

“Wages fell off the cliff after the financial crisis, and have barely begun to recover,” Frances O’Grady, the TUC general secretary, said. “People cannot afford another hit to their pay packets. Working people must not foot the bill for a Brexit downturn in the way they did for the bankers’ crash.”

In Germany real wages grew by 13.9 per cent and in France by 10.5 per cent. Portugal was the only other OECD member apart from Greece and the UK to suffer a fall over the period.
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Elderly residents accuse council of “bullying” to make them pay as much as £13,700 to reach their own homes

Elderly residents have accused a council of “bullying” them by trying to make them pay as much as £13,700 to reach their own houses.

And now Shepway District Council is threatening to block the access altogether unless the dispute is resolved.

Three couples and a widow living in Green Lane, Hythe, use two bridges over a dyke to get to their four bungalows.

This means crossing over council-owned land, which had a charge of just over £1 a year for all four households under a 1950s lease but, now that lease has expired Shepway is trying to charge each household £500 a year rent or a one-off payment of £13,700 for permanent access.

One resident, Sue Page, 61, said: “I would call this bullying and intimidation. You don’t dare to even go out because you wonder even if the bridge will be lifted when we come back.

“It is a nightmare, it has cause us sleepless nights.”

Most of the residents, aged from their 60s to 80s, have health problems such as disability from industrial injury, osteoarthritis and heart condition. One is a cancer survivor.

The four homes, plus a fifth, had been under a 50-year lease, from January 1957, to have access through the land, owned by the then Hythe Borough Council, for a guinea (£1.05) a year between them. That would be a rent of 21p each per year in modern decimal currency but Shepway became landowners after replacing the borough council in 1974 and the lease expired in January 2007.

The fifth household bought a permanent right of access from the council for £12,500 in 2011.

In April 2014 Shepway wrote to the remaining householders saying it wanted to charge them. The high price demanded was based on soaring land prices since the 1950s and following advice from chartered surveyors.

But the sums expected have yo-yoed.

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Bills rise for 8m British Gas customers

British Gas’ price rise will effect almost 8 million customers today, forcing them to pay an extra £131 a year for their energy. We list the cheapest deals for those who want to switch.

Millions will begin paying nearly 10pc more for the energy they use from today, just as winter begins to bite.

British Gas, Britain’s largest energy supplier, will put in place a 9.2pc increase that was announced last month, resulting in the average household having to fork out an extra £131 a year for gas and electricity.

Price comparison site, uSwitch.com, said the price rise will affect almost eight million customers.
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Pensioners see incomes eroded by inflation

Paltry returns on ‘safe’ investments such as cash and gilts have caused three out of five retirees lose out on around £2,400-a-year in real terms as inflation eats into the income they use to supplement their pensions.

Investec Wealth & Investment estimates that two-thirds of retired people who rely on savings and investments to fund their retirement have suffered a fall in their income over the past two years.

Depositing nest eggs in cash Isas, savings accounts and premium bonds have come back to haunt many pensioners as below-inflation returns have seen the value of their savings eroded in real terms by £2,400 on average.

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Is inflation making you poorer?

The rate of Retail Prices Index (RPI) inflation in the UK rose slightly to 3.1% in December, up from a rate of 3.0% the month before.

But your personal rate of inflation may not match the official rate of inflation. Use the BBC calculator to get a more accurate picture of how inflation affects you.

The calculator was developed with the Office for National Statistics (ONS). Information entered is safe, as it stays on your computer.

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State pensioners’ 38p a day rise despite increasing living costs

Millions of British State pensioners will receive a rise of just 38p a day from next year despite the dramatic escalation in the cost of living, it emerged last night.
he basic state pension will rise by a minimum of just under £2.69 a week or 2.5pc next year despite today’s lower inflation figures.

The rate of consumer prices index (CPI) inflation in September is traditionally used as a measure to determine next year’s benefit increases, and yesterday’s figures showed that CPI fell to 2.2pc in this month, the lowest level since November 2009.

But under a Government guarantee put in place when it changed the way it calculates state pension increases, pensions must rise by at least 2.5pc.

This means an increase of £2.69 a week next year on the current basic state pension for a man or a woman of £107.45 a week.

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Savers and pensioners ‘lose out on £44.5bn a year’ due to gulf between rates and inflation

Savers are losing an annual £44.5billion because of the gap between inflation and low interest rates, campaign group Save Our Savers says.

Yesterday, the Bank of England kept base rate at its record low of 0.5 per cent, despite prices soaring at nearly two-and-a-half times the Bank’s 2 per cent target.

The Bank’s policy of low rates is designed to help borrowers, whose lending might stimulation economic recovery. But Save Our Savers says it is unfair to ‘penalise savers in order to support those who ran up debts and caused this financial crisis.’

Read more on This is Money

Pensioners’ savings battered by tax and inflation

Older peoples’ incomes are suffering as no account on the market gives them a real-term return on their money, new research shows.

A study by Moneyfacts.co.uk found there is not a single savings account on the market that taxpayers can choose to negate the effects of tax and inflation.

Savers have been struggling to see any real terms return on their deposits for some time, with the Bank of England base rate held at a record low of 0.5 per cent for almost three years, and inflation soaring above the target rate of two per cent.

The problem is especially pressing for retired people, who often depend on their savings to boost their income.
Read more on Age UK website

Pensions of millions of public sector workers set to rise more slowly after High Court ruling

The pensions of millions of public sector workers are set to rise more slowly in future, after a High Court victory for the Government on Friday.

Judges ruled that it was lawful for the Government to increase pensions in line with the Consumer Prices Index (CPI), and not the originally promised Retail Prices Index (RPI).

The change devalues the pensions of workers by between 15 and 20 per cent because CPI is on average lower than RPI.
Unions and public sector pensioner groups brought the case. Although judges ruled unanimously against the unions on three out of four of the grounds of complaint, the unions do have a right of appeal on some issues.

The CPI/RPI change was one of the grievances that saw up to two million public-sector workers strike last week.

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Think tank slams inconsistent pensions increases policy for expats

A race relations think tank has criticised the Government for refusing to inflation-proof the pensions of thousands of Britons, including many from ethnic minority communities, after they move abroad
Under current legislation, only pensioners who move to Europe, and a small number of non-European countries such as the US and Israel, receive the annual cost-of-living increases which are handed out to retirees in the UK.

In all other countries – including the popular expat destinations of Canada and Australia – Britons’ pensions are frozen as soon as they start to receive them abroad, meaning that older people lose spending power with every year that passes.

In a report on the migration options of older black and ethnic minority people in the UK, the Runnymede Trust noted that pensions were frozen in the “vast majority of Caribbean, Asian, African and South American countries”, and that many black and Asian Britons who wanted to retire back to their, or their relatives’, country of birth were therefore particularly affected by the policy.
Read more in The Telegraph

London Tube and bus fares to rise by 6% in 2012

Fares across London’s transport network will rise by less than previously thought next year, the city’s mayor has confirmed.

Boris Johnson said fares will rise on average by 6% rather than 7%, because of extra funds from the Treasury.

“It means we can reduce the increase in January,” he said.

But Labour’s London mayoral candidate Ken Livingstone thought a 6% rise was still too much, stating: “It’s absolutely crucial to keep fares down.”
Read more on BBC website

Osborne looks to dodge hefty pensions and benefits rise after inflation spike

Chancellor George Osborne is exploring ways to avoid raising benefits in line with inflation after September’s 5.2 per cent spike – but pensioners should be safe.

The Government is committed to raising pensions and benefits every year by the higher of Consumer Prices Index Inflation (CPI), 2 per cent, or average earnings.

But with its benchmark inflation month set at September it now faces a massive bill thanks to the sky-high figure recorded.

Now the Treasury is looking at options that could shave billions from its benefits bill, including lifting them in line with average earnings at 2.5 per cent instead of CPI, according to a Financial Times report.

Read more: http://www.thisismoney.co.uk/money/pensions/article-2057121/Inflation-linked-pensions-benefits-rise-scrapped-September-spike.html#ixzz1cppl5Fqf

Whist another report gives a different view