From Loaves to Slices: What a 25p Pension Top-Up Can Teach Us About Inflation

Back in September 1971, the government added a small extra payment to the State Pension for people aged 80 or over, just 25p a week.  

At the time, that little amount could buy around two and a half loaves of bread.  Now, more than 50 years later, that 25p payment hasn’t increased at all. According to the Bank of England, 25p in 1971 would be worth about £3.20 today. But in reality, 25p today only buys a few slices of bread.  By the time I’m a retired 80 year-old, it might just buy me one slice!

Why Are We Talking About This?

Because it’s a simple but powerful reminder of how inflation quietly eats away at the value of money over time, something we see regularly when reviewing finances, pensions, or long-term plans.If you have fixed income streams or forecasts that don’t factor in inflation, the real value of those amounts could be much less than you expect. This could impact your retirement plans, business cash flow, or estate arrangements.

What Should You Do?

We suggest that you:

• Take a fresh look at any long-term income or cash flow projections and consider how inflation might reduce their real value over time.

• Review your financial assumptions regularly.  Things change faster than you might expect.

• If you’re thinking about investments, pensions, or retirement planning, speak with a financial adviser who can help you plan with inflation in mind.

We’re Here to Help

If you’re reviewing your financial future and want to make sure inflation and other financial factors are properly accounted for, we’re happy to help with the numbers. And if you need tailored investment or pension advice, we’re always ready to work alongside your financial adviser to provide you with comprehensive, well-rounded support.

Please do not hesitate to get in touch.

Written by Heather Langtree