The rising cost of living

[ender4]

1 hour ago, StewieGriffin said:

The jump to variable is frightening - 7.45%, adds about £250 on to the monthly repayment. I've never understood why some people prefer variable rates...

Before the 2008 crash, variable mortgage rates were roughly similar to fixed. I went variable in 2007 and it meant that I was on Base Rate +0.99%… which worked out great for me for the next 10 years when base rates were 0.1%

[Genie]

I reckon once inflation comes down later this year interest rates will be slashed again to try and stimulate the economy. Mid 2024 they start to cut the rates again. 

Not financial advice, just my guess.

[sidcow]

8 hours ago, Davkaus said:

I'd do some research and perhaps get some independent advice on that. Unless you're planning on getting an annuity, I think "wind down mode" is a terrible idea.

The logic is they gradually over a 15 year period prior to projected retirement date they start moving funds into safer less volatile funds to protect the value of the fund. 

If you're still a long time from retirement if there is a big downturn your pot can ride it out and recover.  Imagine getting 2 years before retirement and your fund is wiped out due to volitility. 

It's not moved 100% into lower yield secure investments but gradualy each year more and more will be. 

I didn't know they did this but it makes sense. 

Edited May 3, 2023 by sidcow

[delboy54]

1 hour ago, Genie said:

I reckon once inflation comes down later this year interest rates will be slashed again to try and stimulate the economy. Mid 2024 they start to cut the rates again. 

Not financial advice, just my guess.

Especially in General Election year...........

[Davkaus]

2 hours ago, sidcow said:

The logic is they gradually over a 15 year period prior to projected retirement date they start moving funds into safer less volatile funds to protect the value of the fund. 

If you're still a long time from retirement if there is a big downturn your pot can ride it out and recover.  Imagine getting 2 years before retirement and your fund is wiped out due to volitility. 

It's not moved 100% into lower yield secure investments but gradualy each year more and more will be. 

I didn't know they did this but it makes sense. 

I understand the traditional logic, and it made sense in a world of annuities. These days, annuities are terrible value and people increasingly leave their funds invested and use an approach of safe drawdown levels. there's still a large element of risk here, but this means that at the point of retirement your funds will (hopefully!) still be invested for a few decades, so locking them up in safe, low growth funds is far from optimal.

It's a decision for the individual; we all have our own risk tolerances, but I'd consider it carefully and get some independent advice. My view on it is that if you're not going for the annuity, then curtailing your growth for decades is madness when there isn't this "cliff edge" before retirement, but that's my own personal view and not one I'm qualified to advise people on - I am just very aware of how risk averse pension fund providers are - they still typically put even new joiners on their safe, low-growth default plans because they'd much rather someone lose tens or hundreds of thousands of pounds due to low growth for decades than get mad at them for a short term dip.

[Genie]

21 minutes ago, Davkaus said:

These days, annuities are terrible value

I was looking at annuities the other day, some offering £6.5k per year per £100k. I have nothing to base it on but I actually thought that was decent. Historically were they much better?

[Davkaus]

3 minutes ago, Genie said:

I was looking at annuities the other day, some offering £6.5k per year per £100k. I have nothing to base it on but I actually thought that was decent. Historically were they much better?

That's pretty good actually, and above what the usual safe drawdown level is, usually considered 4-5%. Last time I compared annuities was a year or so ago and around 3.5% was considered "good". One of the few perks of interest rates I guess?

[Genie]

I have a good 20-25 years before I need to worry about that. We’ll all be living Mars by then. 

[sidcow]

2 minutes ago, Genie said:

I have a good 20-25 years before I need to worry about that. We’ll all be living Mars by then. 

Not much will change but we'll live underwater.

[Davkaus]

21 minutes ago, sidcow said:

Not much will change but we'll live underwater.

It's ok, Elon will bring that **** submarine

[tinker]

4 hours ago, sidcow said:

The logic is they gradually over a 15 year period prior to projected retirement date they start moving funds into safer less volatile funds to protect the value of the fund. 

If you're still a long time from retirement if there is a big downturn your pot can ride it out and recover.  Imagine getting 2 years before retirement and your fund is wiped out due to volitility. 

It's not moved 100% into lower yield secure investments but gradualy each year more and more will be. 

I didn't know they did this but it makes sense. 

Truss economics dropped the value of the safe bond investments , vanguard and alike, with their higher government bond allocation meant they took a right hammering when she tarnished the UK's financial reputation.

She made shares, global, seem like a safe investment. 

[Genie]

Bit of a drop on the price of diesel here, now £1.52 a litre. Not as cheap as other places but a quick drop of about 7/8 pence.

Unleaded hasn’t dropped though, so the gap between the 2 is about 10p from 17p.

I wonder if the media coverage of the diesel price rip-off has forced their hands.

Edited May 9, 2023 by Genie

[Demitri_C]

8 hours ago, Genie said:

Bit of a drop on the price of diesel here, now £1.52 a litre. Not as cheap as other places but a quick drop of a pig 7/8 pence.

Unleaded hasn’t dropped though, so the gap between the 2 is about 10p from 17p.

I wonder if the media coverage of the diesel price rip-off has forced their hands.

Media should be putting more pressure on them all.  But they don't pribably because  as usual they only have their only self interests at hand

[Stevo985]

Friend of mine bought a flat a few years back. Last year his fixed period on his mortgage ran out.

However his apartment block has the same cladding as Grenfell, so nobody will remortgage for him. Literally nobody, not even his current provider.

So he's stuck paying his variable rate which is going up and up and up.

 

His mortgage payments were £750 a month 18 months ago. They've now hit £1,650

[Guest av1]

39 minutes ago, Stevo985 said:

Friend of mine bought a flat a few years back. Last year his fixed period on his mortgage ran out.

However his apartment block has the same cladding as Grenfell, so nobody will remortgage for him. Literally nobody, not even his current provider.

So he's stuck paying his variable rate which is going up and up and up.

 

His mortgage payments were £750 a month 18 months ago. They've now hit £1,650

Wow that’s horrible

I’m obviously wrong, but I would have thought that would be more a problem with his insurance rather than his mortgage. 
 

 

[The Fun Factory]

On 02/05/2023 at 21:16, MakemineVanilla said:

The £1 coin is 40 years old this year and its purchasing power is estimated to be about 30p compared to a 1983 £.

 

I would have thought it would have been less tbh.

For the coppers  there is an argument that making these coins actually cost more than the actual metal. Could be an argument to scrap 1 and 2p coins.

 

[sidcow]

10 minutes ago, The Fun Factory said:

I would have thought it would have been less tbh.

For the coppers  there is an argument that making these coins actually cost more than the actual metal. Could be an argument to scrap 1 and 2p coins.

 

Isn't that missing the point? 

If a 1p coin costs 5p to make that's not an issue because you don't use it once then throw it away. It's used thousands of times over decades. 

That said I'm old enough to remember 1/2p coins that they did drop.   I expect at some point in the future the 1p will go. 

[sidcow]

What's a half penny chew cost these days. About 5p? 

[foreveryoung]

14 hours ago, Genie said:

Bit of a drop on the price of diesel here, now £1.52 a litre. Not as cheap as other places but a quick drop of about 7/8 pence.

Unleaded hasn’t dropped though, so the gap between the 2 is about 10p from 17p.

I wonder if the media coverage of the diesel price rip-off has forced their hands.

Went through Whitchurch today, cheapest diesel around,  £1.42 a litre.

[stuart_75]

34 minutes ago, The Fun Factory said:

Could be an argument to scrap 1 and 2p coins.

 

A few years ago this was suggested and the Daily Mail and its readership went into meltdown.