Up Shit Creek . . . . ?

This rate of interest's not been seen since 1955 according to the news. Anyone with a mortgage will be pleased - unless they have recently signed up to a fixed rate deal. I'm pleased that most of my money is tied up in fixed rate deals for savers. Providing the insitutions I've chosen remain 'safe'.

I'm just wondering why the words 'headless and chickens' keep popping into mind when I think of Gordon, Darling and Mervyn. Not to mention the toothless FSA and the FSCS. Where will it all end??

Going Down the Swanee . . .

Well I've never known the BofE be so decisive before. Darling/Gordon must have leant heavily on dear Mervyn for this decision. MyMan and I had bets on what the new interest rate would be. He thought the cautious Bank of England could opt for 'half way house' and fix on 0.75% rate reduction. I said that as the news seems so bad perhaps they'd go for 2% - I was very nearly right. I wished I'd placed a bet on it.

Penny Pincher

After a tightfisted 8 years living off our retirement capital I've become rather used to Penny Pinching. Perhaps I should change my blogging name to Penny Pincher. I could re invent myself. That's the beauty of the blogging life. But however much one tries to write as if this is a fictional account real life creeps in. It's hard to keep it out.

Over the last few months I've become much better off. It started last year with being granted, on compassionate grounds, my work pension several years early. I wasn't due to receive it till I was 65. Once my pension came in I was able to cash in my AVC pension. Finally I've been awarded a Carer's Allowance. With several months arrears. Such riches.

Just at the time the whole world appears to be going into financial meltdown I appear to be bucking the trend. Hooray.

What is the True Rate of Inflation?

Gordon Brown as Chancellor and latterly as Prime Minister does boast about the low rate of inflation in comparison to the years under the Conservatives.

However, several years ago the Labour Govt. changed the measure of inflation from the Retail Price Index [RPI] to the Consumer Price Index [CPI] . As can be seen from the graph from the ONS website these rates of inflation do differ by a substantial amount.

The govt can only boast about low inflation when quoting the CPI because the index is made up of many non essential items or one off purchases. However, the old RPI consists of mortgage rates, fuel costs and basic food items - all the necessities of life. The rate of RPI compared to CPI is consistently higher e.g. Nov 2007 RPI = 4.3 % CPI = 2.1 %

I find it particularly interesting that the Govt quote CPI rate of inflation when it serves its own ends and then uses the 'defunct' RPI when to its advantage. Therefore when working out the rate needed to increase the state pension it will use the CPI. Many local govt/civil service pensions are increased annually by the RPI rate. But students' loans will have the interest rate calculated using the RPI rate.

In other words, it appears to me, that if the Govt have to pay out money then they use the CPI but if they are claiming money back from us or to award themselves pay/pension increases then its the RPI figures that are used. MP's pensions are the best available - and are costing taxpayers a fortune.

Planning for Retirement

I thought we would enjoy retirement. My husband used to run 'Preparing and Planning for Retirement' training courses. He had all the answers and all the different viewpoints. He trained many people but he failed to train me. Unfortunately retirement planning wasn't even on our horizon. We thought we had at least a further 10 years of working life. But then retirement found us and found us unprepared.

To have a successful and happy retirement you need several things:

1. Money: Once that pot of money, pension, annuity, savings or whatever is all you have i.e. fixed income then finances take on a whole different meaning. Suddenly you are aware that every penny that goes out of the house has gone for good. That unless you go out to earn some more 'this is it'. Men in particular seem to be much exercised by this when they retire.
2. Interests: If you want to enjoy retirement to the full there are many clubs, social events , hobbies and activities that you can join in. Once you are no longer committed to a working life you can fill your daily routine with swimming, walking, cruising, bird watching, investment clubs, travelling, wining and dining, study, bowls, bridge, blogging, holidays. The list is endless. What may not be endless is the pot of gold - the money to finance all these possible interests and new hobbies. But once you are retired then many of them don't take up much cash and a great deal of enjoyment can be had for very little outlay. The U3A is one example. The University of the 3rd Age, unlike the Open University, runs on a very small budget. It is very popular. This group is for older people where some members with a perceived level of expertise then educate others to the same level of incompetence. A bit like 'Sit by Nellie' training at work. A bit like a real world interactive social version of an inaccurate Wikipeadia.
3. Health: You need good health to enjoy all of the above interests. You need good health to get out and about and away from your spouse for a few hours. This is advisable. For the both of you. For your mental health. This is the first time in ** years you have ever spent more than a couple of weeks together 24 hours a day. And do you remember just how stressful holidays can be when you spend so much time together? Well retirement is just like that for 12 months of the year. I'm not talking about holidays away from home - you both have distractions then - no I'm talking about holidays at home; Christmas, Easter etc.
4. Tolerance: You need a bucket load of this. Suddenly the housekeeper (usually the wife) has lost 'her space'. The spouse is no longer out of the house 9-5 but hanging around and getting under her feet as she tries to do all the 101 household chores. Querying whether this is the best or most efficient way of doing the task.Querying the amount of water being used and how often the washing machine is put on. Offers of help e.g. dusting/hoovering if taken up are considered only to be necessary once every 3 months. "But I did that last week - it can't need doing again, surely". Supermarkets during the week are full of retired men assisting their wives with the weekly shop. Every time you go by a couple you can hear the same type of conversation going on. She's usually looking harrassed and he's usually saying somethin along the lines of: "do we really need foil again, can't you wash and re-use the roll you bought last month?" - " it's HOW MUCH?!" - "I think you use too much detergent - lets try a cheaper brand" - "lets buy whisky in bulk - think of the saving we'd make" - "lets have steak and kidney pie - you've not made one of those for ages" - "let's buy the small pack - I'm sure we could use less toilet paper". Men like 'manly' jobs to do e.g. car maintenance, gardening, decorating. Tasks that are done once in a while not several times a week.

When alone at home I used to enjoy whizzing through the house tidying, cleaning, polishing everything and then sitting with a mug of coffee to admire my efforts. Now I clean one room and then move on to another. But on returning to the first it's no longer a spotless oasis. I didn't get one minute to admire and revel in its sparkly cleanliness. How I long for the days as they used to be: to to rush through tidy the kitchen, make the beds put the laundry away and then come home 7 hours later and find it all as I'd left it. TIDY. When two of you are home all the time each and every day there are calls on the household budget that didn't occur while you were out at work. Electricity, water, gas consumption goes up. As does coffee, tea, food stuffs and toilet rolls. Towels, tea towels and light bulbs wear out faster than they ever did while you were out at work. Not to mention the various bits n bobs connected with plumbing. Whereas I used to call in a plumber to change a ball cock in the toilet cistern once every 4 or 5 years now it seems to be every other year. Therefore these budget items need to be re-addressed and re-assessed. On the other side of the coin: you can wear your clothes till they fall apart, specs, shoes, handbags and other accessories can be several years out of style. You also have time to shop at charity shops and try and dress on the cheap.

Finally a little anecdote as I was trying to clean in readiness for a tea party.

He: "I'll help you to clean the bathroom and cloakroom"

Me: "There's not room for us to both do it at the same time"

He: "No problem - I'll clean the basin in one room while you do the toilet and the floor in the other and then we can change rooms and I'll clean the second basin"

Me: "Thanks - a lot"