Disco_Destroyer
Trustworthy Freedom Fighter
Joined: 05 Sep 2006
Posts: 6342
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 Posted: Mon Nov 10, 2008 2:38 pm Post subject: Cost of Living! Conclusion:- Give your money to the Bank |
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Noting like laying the seeds to what is to come? 
Oh and passing off the recent BS, oh how the prolls live ay? 
| Quote: | The changing value of money
By Emma-Lou Montgomery
November 10 2008
We could be heading towards the £5.35 pint of milk, according to analysis carried out by Norwich Union. It says that if the household items that have risen in price by more than 10, or even 20 times over the past 50 years, continue to rise, we could be looking at one seriously over-inflated basket of goods at the supermarket checkout in decades to come.
Of course, the investment group's predictions are just that, predictions. And they are meant to shock. Their aim is to get today's generation of non-savers to start planning for the future by realising that today's high prices would look cheap if prices were to continue to rocket at the rate they have done since 1958.So us corporate banking B... can rip you off later just as we have now!! 
See how food prices are rising
It certainly gives you food for thought. And sheds a new light on the current era of high inflation in which we're in.
Food prices have risen in recent months, that's a fact, as have fuel, gas and electricity prices too. But look further back than the past year or so, to 50 years ago and, food has plummeted in price.
In 1957, just a few years after the end of rationing, the average family spent a total of £14.30 a week, out of a gross income of £16. That's the equivalent of £243 a week in today's money, and the average spend now is £130 today for a family of four. As a percentage of earnings we now spend, on average, just 15% on food - not a third or more.
But one thing that was less of an issue in the 1950s was the cost of housing. These costs, including mortgage interest payments or rent, have more than doubled since 1957, according to the government's annual Expenditure and Food Survey.
It cost, on average, £2,300 to buy a house in 1958. Since 1997 alone, house prices have grown by 231% (albeit they've come off slightly over the past 12 months). This means that homeowners are spending more than twice as much of their weekly budgets on mortgage payments and rent as was the norm 50 years ago.
See if you can find a cheaper mortgage deal now
Shifting spending patterns
Figures show that the cost of owning or renting property is now the biggest area of household spending, while the amount spent on food and fuel has fallen over the past five decades.
Last year mortgage payments and rent took up 19% of the average weekly budget compared with just 9% in 1957. The price of transport has also increased, with motoring and travel costs now taking up 16% of people's spending compared with 8% in the 1950s.
Even those rising gas and electricity bills mean we're better off than 50 years ago. The share of money spent on fuel and heating bills has actually halved from 6% in 1957, when coal was the key fuel, to more like 3% today.
See if you can save cash on gas and electricity bills now
Shock tactics or fact?
So what of Norwich Union's shock predictions? Should we be concerned that we could be looking at grocery bills that include £21.23 for 100g of instant coffee, £14.13 for 250g of butter, £98.43 for 500g of cheddar cheese and £57.98 for a pint of bitter down our local?
Well, the latest statistics show that the UK savings ratio went negative in the early months of this year - for the first time since 1958. It recovered slightly in the second quarter but really only slightly, to 0.4%.
In the three months from January to March the average Briton earned £3,751 on average, or £1,250 a month. Yet the average person spent £3,792, leaving a shortfall of £41 in the quarter, or about £13.66 each month. They had to find that from their savings, resulting in the first negative savings rate for six decades.
The average person saved a mere £16 during the three months to the end of June. Average income was £3,826, or about £1,275 a month, with spending of £3,810 in the quarter, or £1,270 a month.
See the top savings accounts
Wage slaves
Of course, you have to factor earnings into the equation to really get a clear picture of just how price rises will hit our pockets.
All being well, wages will continue to rise - although not necessarily in line with the cost of living. However, history shows that earnings do (periods of economic downturn aside) rise higher, and faster than living costs. In my nearly 20 years of working I've never seen it!!
For instance, the average weekly earnings of full-time manual workers are 40 times greater today than they were in the early 1950s. For men, average weekly pay has risen from £9 in 1952 to £360 in 2001, and for women from under £5 to £240. oh come on, we're not all that stupid
Which means that all is not as it first appears. In fact, prices still look pretty good, even if they were to continue to increase as they have done for the past 50 years. Thanks to the advancement of technology and global trade, the cost of living is still cheaper than it was 50 years ago. Debatable? Yea there was surely alot less cr@p to fill your lives with, but with that alot less 'I want, me me me...!!'
Take as an example a Belling cooker that cost £43 19s in 1958. That's the equivalent of £1,876.16 today when you compare it to average earnings in 1958. So yes it is cheaper to build now due to technology advancements but look at the build quality now it truly sucks
Only too right then that it was said to "...really look after itself. It will switch itself on, keep the oven at exactly the right heat and then switch off when the meal is cooked even though you're miles away at work or shopping." It needed to for that sort of money. We wouldn't expect to pay anywhere near that amount today. And thankfully we don't have to.
Or take the price of tea. In 1870 "normal working-class quality" tea sold at 3s 4d per pound-weight. In 1889 Lipton tea was offered at "the phenomenally low price" of 1s 7d per pound.
But compare those prices in today's money and you get a different picture altogether. The 1889 price would be equivalent to £5.83 in today's money and the 1870 price would be a whopping £10.62 today. Not exactly what you call low price. And when compared to average earnings of the day you're looking at £36.03 for a brew in 1889, and an astonishing £87.78 in 1870. Is it worth puting anything here 
But before you settle back and think everything's OK at today's prices, bear one more thing in mind. It's not the people in employment who will be worst hit by a continued rise in prices. It never is. It is those in retirement, who have a fixed income to live off, who will be most affected. And, if you're a day over 20 that will be you (assuming that retirement age is 70 in 50 years' time).
The elderly hardest hit
Older people now have less to spend that pensioners did in the 1950s. Data shows that the basic state pension is just 15.9% of the average wage, compared to 18.4% 57 years ago.
The figures, revealed by the Liberal Democrats, show that in 1950 the average full-time weekly wage was worth £7.08 (equivalent to £499 in today's money) while the basic weekly state pension was £1.36 (£91.65). Last year the average wage had climbed to £549.80, but the pension was just £87.30. and what of the pilfery minimum wage??
The message is, start setting something aside for your latter years. Because as prices rise, which they will do, and pensions fail to keep up (which is almost inevitable) it's will become increasingly difficult to live as comfortably as you might like if you intend to live on a basic state pension alone. So us corporate banking B... can rip you off later just as we have now!!
Can anyone afford to retire? |
http://money.uk.msn.com/consumer/article.aspx?cp-documentid=10836071
_________________
'Come and see the violence inherent in the system.
Help, help, I'm being repressed!'
“The more you tighten your grip, the more Star Systems will slip through your fingers.”
www.myspace.com/disco_destroyer |
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