Value of Money Declines, Placing Pressure on Purses
New research suggests consumers’ money is not going as far as used to 50 years ago, falling in value over this period by 94 percent.
The most erosion to the value of money, according to BM Savings who used data from the Office for National Statistics (ONS), was felt during the 1970s when retail prices rose by an average of 13 percent.
In the last 50 years, there has been an 18 fold increase in retail prices, meaning today a consumer would need £1,796 to purchase the same items they could buy with £100 in the 60s.
During the 2000s, retail prices rose the least, on average by three percent.
“There is no doubt that the value of money has fallen dramatically since 1960 as a consequence of the substantial rise in the general level of prices,” said Suren Thiru, BM Savings, economist.
“It is likely to be reduced significantly further over the next 50 years even if inflation is kept firmly under control.”
The average price for a pint of beer has risen 26 fold over the past 50 years from an average price of 11p in the 60s to £2.94 in 2010.
The cost of essential household items has also risen since this period, as the price of a loaf of bread has risen from 3p to £1.20.
Long Term Savings
According to Standard Life research, almost half of UK adults are unable to plan their finances in the long term, only managing up to a year ahead due to the high cost of living.
A further 17 percent admitted in the study to not being able to plan or save for the future at all in the current economic climate.
If your money is not going as far as it used to, a prepaid credit card could help you budget your monthly outgoings more effectively.