It's happening to our chocolate - but don't let shrinkflation eat at your pension

Shrinkflation has led to a 25 per cent reduction in Toblerone. But ensure your pension doesn't shrink as well

IS nothing sacred? Sometimes it seems all we hear about are attacks on things dearest to our heart.

So it was with some trepidation that I read how our best-loved supermarket items have dwindled over the last few years. Food companies know that if they increase the price of a product, we will spot it.

But if they quietly reduce the weight, and hold the price, we won't spot a thing. Companies can be very quiet when it suits them, you'd be surprised.

For instance: did you notice your favourite things getting smaller? I remember the heady days when Wagon Wheels deserved the name. Today, they are about the size of a 10p.

The publication last week of a list of weight cuts to our favourite products really ruined my day.

Most striking weight losses since 2014: Snickers down 28 per cent, Twix down 20 per cent, and – personal heartbreak for me on this one (we have a great coffee machine, you should come and try it) - the illustrious Jaffa Cake. Down 19 per cent. Even Toblerone. Down 25 per cent.

How could anybody do that to a poor, defenceless Toblerone? The Swiss are such peaceful people.

So where am I going with this? My point is that ‘shrinkflation' is one side of the challenge we face, when planning our retirement. When the time comes, our money is just not going to buy as much as it does today.

So we need to plan ahead. We have to remember that whatever we save will be affected by inflation. Also shrinkflation, deflation, slumpflation, and all the other flations.

Then there's the Bank of England base rate, which makes life more expensive, and could affect us if we are still on a variable rate mortgage. Oh, so you've paid yours off? Grand. But stop smiling and skip to the next paragraph.

Average base rate in the 20th century was 5.64 per cent. Average since records began in 1694 was 4.71 per cent. We're not doing so bad at the moment – average in this millennium was 2.68 per cent, and of course we're now at 0.5 per cent, second-lowest ever but – and I don't think I'm sticking my neck out here – it can only go up from here.

Last July, I told you about how the rising retirement age – the age at which you get your state pension – also has a ‘shrinkflationary' effect on one's retirement income, by reducing the time we have to take our pension before we go. And if you think you're never going to go, give me a ring. I'll get you a great quote for life insurance.

The state pension age for men and women is rising, and is planned to hit 68 in 2037. Some of us, who thought all our lives that we could retire at 60 or 65, and head off on our world cruise, may be forced to work beyond our date. World cruise? The world might have to wait for the pleasure of seeing us.

We know that successive governments, who have disagreed on almost everything else, do agree that cuts in the cost of the state pension have to be found.

The former pensions minister Ros Altmann,whom I quote now and again, gave off last week about how the government have cancelled automatic advice for people setting up their retirement.

So can people not just pick up the phone and talk to somebody who can help them?

:: Michael Kennedy is an independent financial adviser and pensions specialist, and can be contacted on 028 71886005. Further information on Facebook at “Kennedy Independent Financial Advice Ltd”.

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