All too often, the UK’s monthly inflation figures are greeted with, at best, ambivalence and more commonly, with relative ignorance. However, for those that are retired or coming up to retirement or avid ISA savers, September’s inflation figures from the Office for National Statistics (ONS) hold a greater significance.
For the millions of people drawing a state pension or saving into ISAs, it is interesting to note that September's inflation figure is used by the Government to set the rate for the state pension and benefits, as well as ISA limits.
The relatively high inflation figure of 2.7% this September should mean an additional £2.97 a week for pensioners, taking the state pension payment up to £113.12 a week. However, the latest figure is not a definite and will be confirmed in the Autumn statement, due on December 4th.
September's rate of inflation also influences the amount that can be paid into an ISA each year. The maximum contributions to ISAs are capped every year, with the total currently sitting at £11,520. However, from next April 2014, the limit is expected to rise to £11,880, with a cash ISA limit of £5,940.
Stay tuned for Retirement and Investment Solutions’ Autumn Statement update in December.