Business & Professional
Money Matters: 10 of BelperofIFS: Our First Decade TheYearsImpact Rising Inflation 10 yearslikes ago,paying Belpermore Independent Nobody for things,Financial but inflation Solutions was formed after founder (me,what it may be a particular problem its in 2022. Here’s Kevin Glover) was made redundant from The could mean for your finances. Derbyshire Building Society. Why then, is it increasing? Since Belper has seen the loss of The Derbyshire, The Bank of England has forecast could regularly Woolworths, Somerfield, Thomasinflation Cook and Britannia hit 4% or higherto in name 2022. but That’s partly because some of Building Society a few long-standing the suspected of recent price may be here for institutions thatcauses are now confined torises history. some time. This includes: higher and gas Generations of people have beenoilserved orprices been (driven by worldwide demand) that affect manufacturing; a customers of these organisations. You are probably shortage ofPension staff in lorry and hospitality pushing one. State Agedriving has changed several times andup wages; and supply-chain problems such as global shipping At least interest rates have will most likely do so again. slowdowns silicon chip shortages. not changedand much! Rubbish then and not much better today. The fact that it’s manufacturing costs rather than consumerthis demand for specific may affect Consider – joining the EU products was considered thethe right way shoppers experience decision once upon a time.this inflation. It’s likely they’ll find everything seems a little pricier, rather than particular items suddenly could From my diningfeeling roomshockingly in 2009, toexpensive. an office inThat Heanor, meantothe squeeze incomes especially with National back Belper andofnow to the–present location, much Insurance rising in Aprilthe – isgreyness a little tighter. has changed including of my hair and the size of my waistline! Now as a team of 8 we have seen Notclient just base spenders the expand over the years. ‘Generous’ Savers and Chancellors investors may also notice thelegislation difference. A 4% successive introduce new inflation rate all but the mostthe attractive savings impacting theexceeds public and signposting need for financial rates on advice. offer, meaning savers lose buying power over time. (Though savers are still better off than those not in yoursome lives people over What you – what hascould changed makingabout any interest.) That incentivise the 10 years? jobsinvestments have you had? Has withlast spare cash to How movemany to riskier in the your extended or tragedy struck? How many hopefamily of a better return. times have you moved house? How many pension schemes you been a member of and simply left, Effect onhave pensions through one reason or another? for How many cars, Rising inflation has consequences pensioners, partners and otherprices. life events beyond increasing Thehave ‘tripleoccurred? lock’ means the state pension rises each year by whichever is higher: rises How manyearnings, investments havefrom youthe made and when in average inflation Consumer Price were they last reviewed and looked at? My point is
that the need for financial advice and a solution should not be seen as a one-off. Financial products and solutions were probably right at the time, but just how much has changed since their inception? Investment funds (whether held in pension wrappers or alternative structures such as Stocks and Shares ISAs), are mostly run by fund managers who are also human beings. As humans they may retire, defect to other companies, or run out of luck! Solutions that may have Index,right or 2.5 A prolonged inflation been at percent. the start may no longerspell be of suitable or above 2.5 percent could mean bigger pension rises. effective. Leading fund managers in 2009 may no longer be leading fund managers as we approach 2020. Effect on mortgages Perhaps the biggest concern for many consumers Theyiswill In April 2015, pension regulations changed. how inflation could affectagain. their mortgages. Until the to almost certainly change Pensions from prior financial central banks –and this timecrisis may of no2008, longer be suitable butgovernments just how would traditionally usedashigher ratesyour as aturkey way toover bringthe you know? So, you sitinterest munching down excessive inflation.how Themany theory simple: higher festive period, consider ofwas these questions interest meant money apply topayments you and see whathomeowners may benefit had fromless having a to spend in the shops, meaning retailers couldn’t get away review. with too many price rises. Is 2020 the time to take a look at your financial arrangements once again andbanks get them for to Since 2008, however, central havefittended purpose? concentrate on keeping rates as low as possible so that people have spare money to spend and help keep the Wishing a happy 2020 and a prosperous 10 economyyou moving. Another argument against next rate rises years. is that the current inflation doesn’t appear to be the result of consumers having too much money, but rather goods being more expensive to produce. That means interest-rate rises might not have that much effect and could even cause problems with consumers cutting back on purchases of non-essential goods. By Glover, OnKevin the other hand,Belper the BankIFS of England’s Monetary Policy Committee (which sets interest rates in the UK) may This information is general and is against not intended to conclude rate rises are its only last resort excessive requirements. The data above should address particular inflation.your That means existing borrowers, those coming to not uponterm in itsdeals, entirety shall not be deemed the be endrelied of fixed andand those planning to take out to be or constitute No individual company a mortgage for theadvice. first time, should allor build some should extra act upon receiving appropriate slack intosuch theirinformation calculationswithout and make sure they could cope professional adviceinafter a thorough examination of their with any increase their monthly repayments. particular situation.
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