So, the Spanish inflation rate is currently running at – 0.9%. Good news you might think, if things are cheaper your money will go further. Conversely, the fall in inflation reported last week in the UK (CPI) of -0.1% does not represent good news.
The vast majority of British ex-pats in Spain rely on their pensions and savings income to get by on.
So why should you care about the rate of inflation in the UK? It might well be good for people who work there, as wages show some signs of growth but not so good for pensioners.
How can that be? Well this is the time of year that the figure is used to set the annual increases for some pensioners and disability benefits, as well as public service pensions and the state second pension.
Inflation as measured by the Consumer Prices Index fell to -0.1% in September, this was due to a smaller than usual rise in clothing prices, and falling motor fuel prices. The CPI rate has been at or close to zero for most of this year. It was last in negative territory in April.
Most benefits will be frozen from April because of the latest data
The law does not allow for a down rating of benefits, so the practical effect is that benefits are likely to be frozen from April. The exact change, or lack of it, will be approved by the government in the coming weeks.
What this means for you is that pensioners here and in the UK could soon be facing a squeeze on living standards
If you are affected in some way by the changes outlined above, or have any questions regarding how to make the most of your money, now is the time to come and see me.
The above was kindly provided by Wayne Martin, International Financial Adviser Costa Blanca from the Blacktower Financial Management Group and originally posted at: http://www.blacktowerfm.com/index.php/news/235-uk-inflation-rate-falls-good-news/