Pensions - Articles - CPI 12 month rate increases but still lower than BOE target

 The falling trend in inflation halted this month for the first time since November last year as the annual rate for February increased from January’s rate to 1.9%, just below the Bank of England’s target.

 “Households will be hoping the increase in inflation and stabilisation of wage growth does not herald a reversal of the increasing wage growth and low inflationary environment that they have experienced over the last half year. However, whilst inflation remains low, individuals should look to save any additional income where they can, particularly given that auto-enrolment pension contributions are about to increase and there is continued uncertainty around what impact Brexit may have on people’s spending power.”

 “Individuals need to think carefully about how to protect the spending power of their retirement savings, particularly if we see a continuation of the rise in inflation. The erosive effects of inflation can be very damaging and even in a period of low inflation, today’s money can dramatically reduce in spending power over the long-term.