Posts Tagged ‘Inflation’

Investing for Income

Investing for income isn’t a choice any more, it’s a necessity.

The Daily Mail recently said that with interest rates on deposits below the rate of inflation, traditional savers would have to widen their search to secure a reasonable income.

In the paper the experts quoted said they needed a combination of shares, fixed interest and commercial property to avoid too much risk, and with this could generate an income of 3-5%.

If you are looking for income from your investments give us a call on 0116 380 0133.

Steve Clark


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And the winner is–Inflation!

According to the Daily Mail, there now isn’t a single savings account in the UK that pays interest above the rate of inflation. Percentage CF

With the inflation rate as measured by the Consumer Price Index up from 2.4% to 2.7%, the best easy-access account the Mail could find is an ISA paying 2.3%. Savers who are basic rate taxpayers would need to get 3.38% before tax to match the inflation rate while higher rate taxpayers would need 4.5%.

With the top non-ISA account paying 1.7% gross, a saver putting in £1,000 would see their spending power decline to £986 after 12 months even after banking their interest. But the cuts go on – National Savings & Investments announced it was cutting the rate payable on its own ISA from 2.25% to 1.75% in September.

These are tough times for savers, who need to consider alternatives to standard savings accounts if they need a higher income.

Steve Clark

May Inflation figures

The May inflation numbers from the Office for National Statistics (ONS) came in higher than expected, a reverse of last month’s better than expected data.

Annual CPI inflation for May 2013 was 2.7%, 0.3% up from April and back to the level at the start of the year. The index showed prices increased by 0.2% across the month, against 0.1% drop in corresponding period last year. Most forecasts had been for annual inflation to rise to 2.6%.

The RPI figure rose by 0.2% to 3.1%. Over the month the RPI increased by 0.2%, against no change a year ago.

Steve Clark

Silver inflation is on the up

Rising costs of fuel and food have greater impact on the elderly and the young.

So the imminent rise in inflation – partly the result of the decline in the value of the pound – means pensioners will see their cost of living rise faster than others.

Alliance Trust calculates that the ‘silver’ inflation rate for people over 75 is now 3.2% against the 2.8% rate for under-30s, who benefit more from falling prices for gadgets and clothes.

Age UK do a similar index and the level of inflation is above that recorded by the Retail Price Index or Consumer Price Index. That’s a really important point for those in receipt of an index linked pension to note.

You actual rate of inflation is likely to be higher than any index that your pension is pegged to.

Steve Clark