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Guide to rising living costs

  • Describe the impact of rising costs on retired and working people
  • Explain how people are mitigating rising costs
  • Identify what happens with cash flow modelling
CPD
Approx.60min
Guide to rising living costs
Krzysztof Hepner/Unsplash

Introduction

The rising cost of living has received much attention in the past few months, as the cost of energy has soared and post-pandemic supply issues have meant inflation has risen far past the target set for the Bank of England.

Several factors are colliding: the cost of gas has tripled over the past year, and is set to rise further due to the tensions in Ukraine; national insurance tax rises are planned for April; and inflation is currently above 5 per cent as economies emerge from the pandemic and resources are scarce due to the worldwide shutdown.

So what does this mean for clients of financial advisers? In the main they may on average be in a better financial position than the typical citizen, but there will still be calculations to make. If they are working, there may need to be some adjustments made to their financial planning – pension contributions and investments, for example. If the client is in retirement then calculations will need to be done over whether pension payments will cover everyday costs.

These issues will be looked at in this guide, which qualifies for an indicative 60 minutes' CPD.

In this guide

CPD
Approx.60min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. According to Mike Gummerson in the first article, what is potentially likely to get squeezed in terms of costs in the coming months?

  2. According to the first article, advisers do not make assumptions about how savings and investments will grow in their cash flow modelling, true or false?

  3. What is the big problem with people who are retired when living costs rise?

  4. According to the third article, now is the time to use one's emergency fund, true or false?

  5. According to the fourth article, cash flow modelling should be adjusted every so often to reflect changing circumstances, true or false?

  6. How high does the Bank of England expect inflation to be in the spring?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Describe the impact of rising costs on retired and working people
  • Explain how people are mitigating rising costs
  • Identify what happens with cash flow modelling

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