Re: savings rates versus inflation

Bitstring <nKmdnXBsNbbArhjbRVnyuwA@xxxxxx>, from the wonderful person Andy1973 <archard@xxxxxxxxxxxxxxxxxxxxxxxxxxx> said
Savings rates with the best providers have for a long time been some 2%
above the annual inflation rate, meaning that savings after tax keep some 1%
ahead of inflation. Is it a safe (ish) bet that this will always hold? The
question assumes importance when considering the choice between an
index-linked pension and a lump sum in lieu.

Historically this has not been true. Even if it were, when inflation hits 18%, 20% taxed is going to be less than inflation.

Note that many 'index linked' pensions are actually only indexed to some level of RPI like 5%.

If you want inflation, and base rate, figures for the last umpteen years, here they am (year to, RPI avg, and base rate avg):

Apr-76 Apr-77 Apr-78 Apr-79 Apr-80 Apr-81 Apr-82 Apr-83 Apr-84 Apr-85 Apr-86 Apr-87 Apr-88 Apr-89 Apr-90 Apr-91 Apr-92 Apr-93 Apr-94 Apr-95 Apr-96 Apr-97 Apr-98 Apr-99 Apr-00 Apr-01 Apr-02 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07

24.6% 15.3% 13.9% 8.3% 16.0% 16.2% 11.5% 7.0% 4.7% 5.1% 5.9% 3.2% 4.0% 6.1% 7.8% 9.6% 4.7% 3.1% 1.7% 2.7% 3.2% 2.4% 3.3% 3.1% 1.6% 3.0% 1.5% 2.1% 2.8% 3.1% 2.6% 3.8%

10.0% 11.6% 7.6% 10.9% 14.9% 15.3% 13.3% 11.2% 9.4% 11.0% 11.9% 10.5% 9.1% 11.4% 14.4% 14.3% 10.9% 8.29% 5.75% 5.79% 6.58% 5.94% 7.04% 6.81% 5.40% 5.96% 4.63% 3.96% 3.71% 4.60% 4.58% 4.83%


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