Here on the Informed Choice blog, we have often pointed out that price inflation varies depending on how you spend your money.
Different goods and services face different cost increases.
One group often stung by higher than average price inflation is the elderly. New research suggests that the wealthy have also shouldered a high rate of inflation during the past year.
The research by wealth managers Stonehage found that the ultra wealthy in London have experienced a 4.9% increase in the cost of luxury goods and services during the past year.
During the previous year, these luxury goods and services fell in value by 1.6%.
Higher price inflation for the ultra wealthy was driven to a large extent by the rising cost of ‘investments of passion’, which were up by 14.8%.
High end cars, watches and jewellery all experienced price rises due to the falling value of Pound Sterling relative to the Euro and Swiss Franc.
An increase in demand for prestige cars and designer fashion also contributed to the price rise.
Over time, price inflation is inevitable.
When factoring inflation into your Financial Plan, it is important to tailor the inflation assumption based on your personal spending patterns, rather than simply using a national average.
Do call us on 01483 274566, email hello@icl-ifa.co.uk or use our online contact form to get in touch and find out how we can help you manage your Financial Planning against a backdrop of rising prices.
