17 May 2010, 12:46pm
personal finance:


  • May 2010
    M T W T F S S
    « Apr   Jun »
  • Archives

  • Inflation ahoy – here’s how you can beat it

    An increase in VAT seems to be on the cards, and that leads to pretty much the same increase in inflation, less a little to allow for the fact that food isn’t subject to VAT in the UK.

    Tax-free Index-linked National Savings Certificates look like one way to try and claw this back from the Government, I am toying with throwing in the towel on my Cash ISA, which I struggle to get 2.5-3% variable on. RPI scans back a year on prices to get the interest rate. The VAT rise will probably be announced on June 22nd so buying certificates on the last day in May would capture the entire inflation boost from the rise in VAT on maturation in 3 years, plus of course the inflation boost from the earlier printing money like drunken sailors quantitative easing.

    Since the purpose of an emergency fund is to buy stuff, probably VAT rated, doing nothing is letting George steal 2.5% from the value of my fund next month. True, if the emergency happens in the first year I am stuffed, as these can be cashed in early but attract no index-linking in the first year.

    […] personally fear inflation ahead, but it’s quite possible that my thinking is elementary and not deep enough if what Nicole is […]

    […] alliance of hedge funds, ancient investors like Jim Slater, and money bloggers seemed the first to worry about inflation. As the year ends it now seems every newspaper, fund manager, and man in the street is an inflation […]

    […] of the UK government, which I believe will debase the currency, shafting savers and hastening in serious amounts of inflation. So the gold and silver holdings (these are ETFs) should be no great surprise. They let me think […]

    […] is the endless concern. I have a fair amount tied up in cash, and inflation is busy at work destroying the value of it. QE […]

    […] some optionality, but I’ve never been tempted to add to it as an ISA, though I did take those nice guys at NS&I up when they were offering inflation-proofed cash. If they did that again to be honest I’d […]


    Leave a Reply

  • Recent Posts

  • Subscribe to Simple Living In Somerset via Email

    Enter your email address to subscribe to this blog and receive notifications of new posts by email.