Retirement, inflation and a bar on Mars

Some say that inflation is good. The capital of your mortgage is eroding, while the price of your home is rising, for example! This is an argument for collateral only for interest, which consultants do not recommend. Repayment is much lower if capital is not repaid. Take an extreme example – 35 years ago I took out a mortgage for a house so she could buy a house in End End Terrace, she paid £ 8,995 for it and wanted a 95% £ 8545 mortgage with a deposit of £ 450. Today the house is worth £ 160,000 and she would have £ 8,545 left if it were only interest. Today, people are taking over car financing!

100 years of inflation meant that teachers ’annual salaries rose from £ 176 a year to £ 30,889 on average. Gold was worth £ 18.93 an ounce, now over £ 600 an ounce and growing.

In 1971, a decade went by in the UK – it was a good reason to raise prices, which, as many fear, will also be when we join the Euro. Inflation can be judged by the Mars, which is often mentioned in price comparison tables. In 1982, the Mars bar cost 0.16 sts, now more than 0.45 sts. Allowing this price increase, let’s use the number of sea bars to compare inflation: –

ItemsMars Bars 1982Mars Bar 2007

House – 147 775 – 474 053

Porsche 911 – 104,500 – 170,000

Double oven Aga Gas – 6,218 – 15,121

Washing machine – 1875 – 560

Gasoline gallon – 10 – 11

A pint of beer – 4 – 7

Frozen chicken – 4 – 10

Now let’s look at retirement. If you take a personal pension, like me, and pay £ 100 a month from the age of 30, you are projected to receive a pension of around £ 12,000 a year or 6,250 nautical bars a month at the age of 65. In fact now at the age of 55, with declining profitability and paying for 25 years, the forecast has dropped to £ 3,000 a year or £ 555 a bar a month!

So we can say that “Mars in the day – helps to work, relax and pay”!