As Britain's savings rate hits its lowest level for 50 years, Norwich Union, part of Aviva, is warning young people that they shouldn't let the credit crunch stop them considering their financial futures now - or they may face regrets in retirement.
- Norwich Union warns against a nation of retirement regretters
As Britain's savings rate hits its lowest level for 50 years(1), Norwich Union, part of Aviva, is warning young people that they shouldn't let the credit crunch stop them considering their financial futures now - or they may face regrets in retirement.
A new study from the investments and pensions specialist shows that the cost of many household items has risen by more than 20 times in the last 50 years, and predicts that today's 20 and 30-somethings could be facing a four-figure average weekly shopping bill in another half century, if the trend continues.
According to these calculations, 2058 could see a pint of milk cost around £5.35, while a loaf of white bread could set shoppers back more than £27. A kilo of potatoes could cost nearly £13, while smokers could be stumping up more than £76 for a packet of 20 cigarettes(2).
Norwich Union found further typical 2058 grocery bills could look something like this(2):
- Butter (250g) £14.13
- Flour (1.5kg) £10.63
- Pork (loin, kg) £67.32
- Cheddar cheese (500g) £98.43
- Eggs (a dozen size 2) £31.22
- Instant coffee (100g) £21.23
- Sugar (granulated, kg) £10.08
- Apples (kg) £24.20
- Pint of bitter £57.98
And although house prices have fallen in recent months, overall the increase since 1958 is huge. So much so that those buying a house in 2058 could be looking at prices in excess of £12.2 million(3) for the average des-res!
Paul Goodwin, head of marketing, corporate and pensions for Norwich Union, says: "These predictions for the future may seem extreme, but the fact remains that many household expenses have risen by 10 or 20 times or more in the last 50 years, so it's perfectly possible that the same could happen again in another 50 years' time.
"As the credit crunch bites, most people are focused on short term savings, but it's important that they also start thinking about their long term futures, even if they are only putting away a small amount each month.
"As a rule of thumb, the sooner people start saving towards their future, through a pension or investment product, the more comfortable they can expect their later years to be. So those who start saving early can expect to reap the rewards in retirement."
Norwich Union, part of Aviva, is a leading provider of pensions, investments and insurance products.
-ends-
Press office contact:
Sarah Poulter
Telephone: 01904 452828 / out of hours 07800 691569
Notes to editors:
- (1) Source: Office of National Statistics, Household Savings Ratio.
- (2) Source: Office of National Statistics, cost of items adjusted in new pence.
| Item | Average 1958 UK price (pence) | Average 2008 UK price (pence) | Predicted average 2058 UK price (pence) |
| Milk (per pint) | 3.3 | 42 | 535 |
| Loaf of bread (white, unwrapped) | 4.5 | 111 | 2738 |
| Butter (250g) | 7.8 | 105 | 1413 |
| Flour (1.5kg) | 9.6 | 101 | 1063 |
| Pork (loin, kg) | 48.6 | 572 | 6732 |
| Cheese (cheddar type, kg) | 26.7 | 725 | 19686 |
| Eggs (per dozen, size 2) | 27.5 | 293 | 3122 |
| Instant coffee (100g) | 19.6 | 204 | 2123 |
| Sugar (granulated, per kg) | 7 | 84 | 1008 |
| Potatoes (white, per kg) | 3.9 | 71 | 1293 |
| Apples (dessert, per kg) | 9.8 | 154 | 2420 |
| Pint of bitter | 10.1 | 242 | 5798 |
| Cigarettes (20 king size filter) | 37.6 | 536 | 7641 |
Predictions have been made by calculating the percentage increase of 1958 prices compared to 2008 prices, and then applying this same increase to 2008 figures to forecast possible costs in 2058.
(3) Sources: Nationwide House Price Index historical data. 1958 Q4 average UK house price: £2,068. October 08 average UK house price: £158,872. Prediction has been made by calculating the percentage increase of the 1958 average price compared to the 2008 price, and then applying this same increase to 2008 figures to forecast possible costs in 2058. Predicted possible price: £12,205,180.
Figures are based on past price rises and should not be viewed as a reliable indicator of the future.
About Norwich Union
Norwich Union is one of the UK's biggest life insurers. It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
Norwich Union has strategic alliances with building societies and other leading UK brand names including CIS and The Royal Bank of Scotland Group. Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media
In the summer of 2009 Norwich Union will change its name to Aviva. Aviva is the world's fifth largest insurance group and operates in 27 countries. Aviva is to become the customer brand worldwide, thus enabling the company to compete even more effectively on a global scale for the benefit of customers, staff, business partners and shareholders.