The True Cost Of Inflation

The True Cost Of Inflation

Over the past year we have seen price increases in almost everything, from houses to clothing, but what is the true cost of inflation today and how does it effect us all on a day to day basis.

Since the recession began around August 2007, inflation (CPI) has increased from 1.8% to 4.5% which is an increase of 3.3% in 4 years. This increase along with a reduction in banks lending to businesses has led to more people being made unemployed and struggling to pay their financial obligations.

The increase in inflation has meant that gas and electricity, oil, food and clothing etc have all increased in price which has then further increased inflation.

Recently, all of “the big six” energy companies in the uk announced they will increase their prices in the near future. These changes include;

Energy Companies Average gas Price Increase Average electricity Price Increase
Scottish Power 15.4% 4.5%
Scottish & Southern Energy 18% 11%
Brittish Gas 18% 16%
EDF 15.4% 4.5%
Npower 15.7 7.2
E.ON 3% 9%

 

 

 

 

 

 

 

 

 

All of the energy companies who are increasing their prices have stated it was because of wholesale prices for oil and gas, which has forced them to raise their price tariff.

Food Inflation

In the past year oil prices have risen which has increased the price of food. Current food inflation is 5% and has grown 16% over the past 3 years which is an average increase of 5.6% each year.

Food is a necessity for people to survive, however an increasing number of people are finding it harder to be able to afford both food and heating.

Pay Inflation

In August 2007 the average weekly earnings growth including both bonuses and arrears was 5%, however by Dec 2010 that figure had slowed to 1.3%.

With the price of everything increasing and pay growth slowing down it has led many people to question what the outcome will be and when will the inevitable consequence be paid.

Outcome Of Inflation

The ultimate outcome from the current financial predicament would be a complete collapse of the stock markets however before that there would be a more likely outcome…more people in debt becoming insolvent.

Insolvent is when a person or company is unable to meet their financial obligation and has to enter a debt solution to help them. This debt solution may be bankruptcy or it could be an iva or if in Scotland a trust deed.

If more people were to become insolvent then creditors i.e banks and loan companies will have more bad debt on their books which will then effect their ability to lend more money and help the economy.

Have Your Say…Cut Living Costs

Debt Support Trust have started a cause to cut the cost of living in order to help people manage at least the most essentials necessities liking heating and food. You can join our cause through Facebook and please ask your friends to join as well.

Friday, September 16,2011
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Cost To Rent Increases At Fastest Rate For A Year

Cost To Rent Increases At Fastest Rate For A Year

New figures released by LSL Property Services has found that the cost to rent has grown at the fastest rate for a year.

The average cost to rent in the uk is now £713 PCM which increased from £705 PCM last month, an increase of 1.2%.

“We are in the thick of the busiest time of year for the rental market, and red-hot demand for properties is driving rents up at their fastest monthly pace in the last 12 months,” said David Newnes, LSL’s estate agency managing director.

 

Debt Support Trust is a registered debt advice charity (SC041902) providing debt advice on a range of debt solutions including;

Benefits Advice

General Debt Advice

Individual Voluntary Agreement (IVA)

Protected Trust Deed (Scotland)

Refinance

Bankruptcy

Friday, September 16,2011
Debt Support Trust
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EDF Energy Price Increase

EDF Energy Price Increase

The last of the big six energy companies has announced they will increase their energy price, EDF will increase their price tariff from 10th November.

EDF will increase their electricity prices by 4.5% and their gas prices by 15.4% as the wholesale market continues to put pressure on energy companies.

“We have absorbed rising wholesale energy, network and other costs as long as possible but must reluctantly now pass some of these through to consumers,” said Vincent de Rivaz, chief executive of EDF Energy.

Debt Support Trust is a registered debt advice charity (SC041902) providing debt advice on a range of debt solutions including;

Benefits Advice

General Debt Advice

Individual Voluntary Agreement (IVA)

Protected Trust Deed (Scotland)

Refinance

Bankruptcy

Thursday, September 15,2011
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Congestion Charge Could Replace Fuel Duty

Congestion Charge Could Replace Fuel Duty

A think tank group have suggested that one way of lowering the price of petrol would be to replace fuel duty with a congestion charge.

The suggestion comes as the Institute for Fiscal Studies,who were reviewing the UK tax system said they found it to be inefficient and complex.

Paul Johnson, director of the Institute for Fiscal Studies, said “Successive governments have failed to set out a coherent strategy for tax. As a result the current set of taxes is complex and often incoherent and they impose a much greater cost on the economy than need be,”.

 

Debt Support Trust is a registered debt advice charity (SC041902) providing debt advice on a range of debt solutions including;

Benefits Advice

General Debt Advice

Individual Voluntary Agreement (IVA)

Protected Trust Deed (Scotland)

Refinance

Bankruptcy

Thursday, September 15,2011
Debt Support Trust
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Difference Between Trust Deed & Protected Trust Deed

Often people ask what the difference between a Trust Deed and a Protected Trust Deed is. There is a slight, but important difference between a Trust Deed and Protected Trust Deed.

For people with severe debt problems and who are insolvent, they may consider a Protected Trust Deed as an option to resolve their debt problem. This solution is only available to people living in Scotland who owe over £10,000 in unsecured debt. There are other criteria which you can find on the Protected Trust Deed page.

Trust Deed

A Trust Deed is part of the Protected Trust Deed process. If you are applicable for the debt solution you would need a licenced Insolvency Practitioner to administer your case.  The Insolvency Practitoner would create the Trust Deed document which would be signed and issued to each of your creditors. A notice will also be placed in the Edinburgh Gazette.

Protected Trust Deed

After 5 weeks, if less than 1/3rd in value or a majority in number don’t object to the Trust Deed proposal it will have gained protection and the Trust Deed will have become a Protected Trust Deed. The protection ensures both you and your creditors are bound by the terms of the Protected Trust Deed.

Read about the available debt solutions on our debt help page.

Wednesday, September 14,2011
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Fuel Duty Rebate For Remote Islands

Fuel Duty Rebate For Remote Islands

The European Commision has agreed in principle to a pilot scheme which would see a 5p fuel duty rebate for remote islands in Scotland.

While the discount would help, the average price for a litre of fuel would still be 10p more expensive than anywhere else in the UK.

Road Haulage Association Scotland director Phil Flanders welcomed the scheme as an “acknowledgment there is a problem” and said it should be extended across rural Scotland.

 

Debt Support Trust is a registered debt advice charity (SC041902) providing debt advice on a range of debt solutions including;

Benefits Advice

General Debt Advice

Individual Voluntary Agreement (IVA)

Protected Trust Deed (Scotland)

Refinance

Bankruptcy

Wednesday, September 14,2011
Debt Support Trust
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Have Your Say…Cut Living Costs

Have Your Say…Cut Living Costs

Debt Support Trust have now created a new cause called “Have Your Say…Cut Living Costs” which can be found on Facebook.

We would like to raise awareness about the rising cost of living with inflation now at 4.5%. Gas, electricity and petrol prices among others have all risen recently.

A spokesman at Debt Support Trust said “Almost everyday we’re hearing about people who are going without basic living essentials. Yesterday the advice team spoke to a man who hadn’t ate properly in 3 days because he couldn’t afford it. The situation, for many, is becoming unacceptable.”

 

Debt Support Trust is a registered debt advice charity (SC041902) providing debt advice on a range of debt solutions including;

Benefits Advice

General Debt Advice

Individual Voluntary Agreement (IVA)

Protected Trust Deed (Scotland)

Refinance

Bankruptcy

Tuesday, September 13,2011
Debt Support Trust
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Inflation Rises To 4.5% In August

Inflation Rises To 4.5% In August

Inflation rose to 4.5% in August from 4.4% in July according to the Office for National Statistics which also showed that there was a 3.7% increase in clothing and footwear while petrol and energy costs also increased.

The Retail Prices Index which also includes mortgages increased from 5% in July to 5.2% in August.

“The rate is likely to move higher in coming months as utility bills continue to increase, putting further pressure on already-strained household budgets,” said Chris Williamson, chief economist at Markit.

 

Debt Support Trust is a registered debt advice charity (SC041902) providing debt advice on a range of debt solutions including;

Benefits Advice

General Debt Advice

Individual Voluntary Agreement (IVA)

Protected Trust Deed (Scotland)

Refinance

Bankruptcy

Tuesday, September 13,2011
Debt Support Trust
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Living Standards To Worsen

Living Standards To Worsen

Living Standards in the UK are set to worsen according to the Institute for Fiscal Studies which says the affect of the recession is “only just begun to be felt”

The IFS went on to warn that they predict a 3.5% drop in household income, which would be the largest drop in 30 years.

Robert Joyce, research economist at the IFS said, ‘The current economic downturn began more than three years ago, and may seem like old news.

‘But, as in other developed countries, the most severe consequences of the recession on UK living standards have only just begun to be felt.

 

Debt Support Trust is a registered debt advice charity (SC041902) providing debt advice on a range of debt solutions including;

Benefits Advice

General Debt Advice

Individual Voluntary Agreement (IVA)

Protected Trust Deed (Scotland)

Refinance

Bankruptcy

Sequestration

Debt Management Plan

Monday, September 12,2011
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UK Interest Rate Stays 0.5% But For How Long

UK Interest Rate Stays 0.5% But For How Long

The Bank of England has held interest rates at 0.5% for the 31st month in a row after the rates were lowered in March 2009.

With the increased cost of living aggravated by the price rises from utility companies many people are asking the question “how much longer can interest rates remain low”?

If the Bank of England were to raise the base rate it could have a detrimental effect on home owners who are already in debt or struggling financially. many savers however are being forced into using their savings to supplement pensions or salaries.

Saver groups are now calling for interest rates to increase after a report found that savers had lost £43bn since interest rates fell while mortgage borrowers have gained £51bn.

Simon Rose from Save Our Savers commented “The Monetary Policy Committee (MPC) decision to cut it to 0.5% in March 2009 was because the February Inflation Report had implied a substantial risk of undershooting the 2% CPI inflation target”

He continued “31 months later, the situation is rather different. CPI inflation is 4.4%, yet bank rate is still 0.5%. The MPC’s inaction over base rates is odd, given that the MPC’s role is explicitly to set an interest rate that it judges will enable the Government’s inflation target of 2% to be met”

 

Debt Support Trust is a registered debt advice charity (SC041902) providing debt advice on a range of debt solutions including;

Benefits Advice

General Debt Advice

Individual Voluntary Agreement (IVA)

Protected Trust Deed (Scotland)

Refinance

Bankruptcy

Friday, September 09,2011
Debt Support Trust
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