State Pension Increase

[Sean Regan]

I had the notification of my State Pension increase today.

We're getting a wacking great 2.85% increase on last year!

This will be "boosted" by the, "Age Addition," of 25p a week!

I read on-line that the UK Inflation Rate is at 2.50%, compared to 2.60% last month and 4.00% last year.
This is lower than the long term average of 2.82%.
From where do they get these figures?

 

[Meadowlark]

If you are getting an increase of 2.85% and your UK inflation rate is 2.5%, seems like you are actually coming out ahead. Many on fixed income are not that fortunate.

...From where do they get these figures?

It depends on the Country and its Government.

In the USA, it's done by the Bureau of Labor Statistics (BLS) which relies on the Consumer Price Index (CPI). They compile data on the average price changes of a "basket" of goods and services purchased by households. This includes items like food, housing, clothes, transportation, medical care, education, and recreation.

Where it gets tricky is in how they weigh the significance of each item in terms of importance. Often this is where politics gets involved, especially as elections approach.

 

[Sean Regan]

I had the notification of my State Pension increase today.

We're getting a wacking great 2.85% increase on last year!

This will be "boosted" by the, "Age Addition," of 25p a week!

I read on-line that the UK Inflation Rate is at 2.50%, compared to 2.60% last month and 4.00% last year.
This is lower than the long term average of 2.82%.
From where do they get these figures?

If you are getting an increase of 2.85% and your UK inflation rate is 2.5%, seems like you are actually coming out ahead. Many on fixed income are not that fortunate.


It depends on the Country and its Government.

In the USA, it's done by the Bureau of Labor Statistics (BLS) which relies on the Consumer Price Index (CPI). They compile data on the average price changes of a "basket" of goods and services purchased by households. This includes items like food, housing, clothes, transportation, medical care, education, and recreation.

Where it gets tricky is in how they weigh the significance of each item in terms of importance. Often this is where politics gets involved, especially as elections approach.

The inflation rate is misleading. I would imagine that the average person only buys a fraction of the goods and services on which inflation is based.
A high proportion on which people of my age spend their money, is on gas, electricity and food. The price rises in food recently, have been excessive.
Some instances, in my experience, have been between ten and twenty percent.

Income tax eats 28% of my state pension, due to it being more than my personal allowance.

 

[Meadowlark]

... The price rises in food recently, have been excessive.

In most cases, it's supply and demand...interrupt the supply and prices skyrocket. A current example is the price of eggs here in USA has recently gone out of sight.

The cause is a bird flu that is forcing growers to slaughter millions of chickens. Makes me wish I had my chickens back.

 

[Sean Regan]

We all know some of the reasons, they've been well documented. But some price increases are inexcusable as far as the public are concerned.
As a retired superstore general manager. I know what can happen.

The buyers for these big chains are given a target gross profit to achieve for their particular group of lines. Fail to achieve it... and no bonus!
This target will be well in excess of 30%.
As you say, some increases in cost prices are unavoidable. But these chains want to stay competitive with each other, so they'll absorb part of the increase. They'll make it up by increasing the price of other lines in that, or another buyer's group of lines, by as much in some cases, by ten to twenty percent. (I e-mailed Sainsbury's about a couple of lines, with those sort of increases recently and got the usual bollox in a reply).
They can do the math, well, a programme on a computer can. They know the average volume of sales for each of the lines for which they are responsible, so it can work out what needs to be increased to achieve their overall target.
Most chains have price bands for their stores. A particular line will not be the same price in every store. Smaller stores and those within more affluent areas, will have higher prices than those where a competitor is only a few yards away, or in an area of low income residents. There are opportunities for some, "price jiggery-pokery."

These big chains all make respectable profits, regardless of the economic situation, as we all have to eat.

 

[Oliver Buckle]

Call me cynical, but if they base it on a basket of goods and a supporter of the Govt. produces some of those goods and keeps the price low ...