THE year 2016 can definitely be described as interesting, and with figures showing inflation has risen in the last month and is set to rise again in 2017, how can you ensure you’re prepared for your financial future?
So, 2016 has been quite a year. We’ve had the referendum result, which shocked quite a lot of people. We’ve had the US presidential result, which shocked quite a lot of people. We’ve also seen a lot of well-loved celebrities pass away, which shocked quite a lot of people.
On the day the Office of National Statistics announced that UK inflation hit its highest level in more than two years, James Blunt also announced that he is going to release another album, which has shocked quite a lot of people. He posted on Twitter - “If you thought 2016 was bad - I’m releasing an album in 2017”.
Blunt is well-known for his comebacks to trolls on social media, and while his tweet may have been said in jest, it could prove to be an insightful metaphor for what may happen in the new year.
Social media has been awash with 2016-related memes and people are pinning their hopes on things getting better once the clock strikes midnight on New Year’s Eve.
However, events may continue on their current path, especially with concerns that the fall in the value of the pound since the Brexit vote is fuelling the rise in the cost of living.
This inflation could pose a threat to living standards in the UK. Frances O’Grady, general secretary of the TUC, has said that working people are facing over a decade of lost wage growth, with rising prices hitting their pay packets, which could lead to another living standards crisis.
In November, inflation rose to 1.2 per cent up from 0.9 per cent in October. It’s the highest that the Consumer Price Index (CPI) inflation rate has stood since October 2014.
As well as an increase in petrol (up by 1.6 pence per litre), clothing and footwear have increased by 1.6 per cent between October and November.
The price of food and non-alcoholic beverages has risen by 0.4 per cent, which is four times the rate as November 2015, while also making an impact are winter coats, leather sofas, bleach, pizza, computer and printers.
But what does this all means for those of us who aren’t planning on sitting on the sofa, playing on the computer and eating a slice of ham and pineapple?
Well, according to Bank of England, there is expected to be a sharp rise in inflation to 2.7 per cent in 2017, which will put increased pressure on household finances.
Matt Whittaker, chief economist at the independent British think tank, Resolution Foundation, has stated that pay increases are expected to remain ‘subdued’ over the next 12 months as a result of ongoing productivity weakness.
Interesting though, despite the rise in inflation and concerns for 2017, shoppers are treating themselves with sales of supermarkets’ premium own-label brands up by 13 per cent in the 12 weeks to Sunday, December 4.
It’s almost as is if people are so fed up of 2016 that they just want to splash out on a few luxury items to cheer themselves up in the build up to Christmas.
So, how can you prepare for your financial future?
Now we’re coming to the end of the year, it’s always a good time to take stock of where you are right now, what you want from your finances and what you want to achieve in the future.
Your independent financial adviser can ask you the questions to help you get where you want to, in order to help you ensure you have your financial future.
:: Darren McKeever (dmckeever@wwfp.net) is Northern Ireland adviser of Worldwide Financial Planning, which is authorised and regulated by the Financial Conduct Authority. For a free, no obligation initial chat about your individual finances, call 028 6863 2692, email info@wwfp.net or click on www.wwfp.net. Follow us on Twitter: @WorldwideFP
