How the price of a pint could reach £8… - Savings - News - Moneyfacts

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How the price of a pint could reach £8…

How the price of a pint could reach £8…

Category: Savings

Updated: 27/04/2011
First Published: 27/04/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The cost of a pint of beer could be approaching £8 by 2060 if prices continue to rise at their current rate, according to new research into the value of money.

BM Savings' analysis of data from the Office for National Statistics revealed the value of money has fallen by 94% over the last 50 years.

An 18 fold increase in retail prices means that someone today would need £1,796 to have the equivalent purchasing power of £100 half a century ago.

Alternatively, £5.57 in 1960 would provide the same spending power as £100 today.

The research illustrates how the changing value of money is reflected in the cost of everyday items – so, for instance, the average price for a pint of beer has risen 26 fold over the past 50 years from an average price of 11p in 1960 to £2.94 in 2010.

The prices of essential household items have also risen substantially, with the average price for a loaf of bread increasing 20 fold from 3p in 1960 to £1.20 today.

Looking forward, it is calculated the value of money could decline by 63% if retail prices rise each year in line with the Government's target for consumer price inflation of 2%.

If this were to occur, £269 would be needed in 2060 to enjoy the same spending power as someone with £100 today.

Put into practice, in 50 years' time the price of a pint would reach £7.92, a loaf of bread would cost £3.23 and a pint of milk would set you back £1.18.

The startling research brings into focus the importance of savers limiting the impact of inflation and changes in the cost of living on their savings.

According to Moneyfacts.co.uk, a basic rate taxpayer needs to find a savings account paying 5% per year in order to stop inflation and tax effectively eroding their savings pot away.

At present, only 25 such savings accounts are currently available, 24 of which are fixed rate ISAs.

Looking for a Fixed Rate Cash ISA - Compare cash isa rates and best isa rates for transfers

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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