Source: The Telegraph – How prices changed over 30 years
The falling value of money was underlined today by a study that showed a two thirds (67pc) fall over the last 30 years.
Purchasing power has been crushed by the spiralling cost of everyday costs.
The cost of a pint of beer has risen from 73p to £3.18 between 1982 and 2012, according to the research by Lloyds TSB Private Banking.
Alcohol prices have been pushed up far more than inflation due to steeply rising duty.
A three-fold increase in retail prices means that someone would need £299 today to have the equivalent purchasing power of £100 back in 1982, the year in which the Duke of Cambridge was born and Culture Club and Bucks Fizz had number one singles.
The research suggested that if inflation rises in line with government targets, someone will need to have £229 in their back pocket in 2042 to have the same spending power as £100 now.
Its analysis of official and commercial figures found that a loaf of bread has increased more than three-fold in the last three decades, from 37p in 1982 to £1.24 by 2012.
Despite a sluggish market in recent years, average house prices have soared by six times over the period, from £45,211 to £273,700.
The price of a pint of milk has increased at a slower rate, doubling from 20p 30 years ago to 46p.
The purchasing power of cash has eroded at an average rate of 3.7pc a year over the past 30 years.
Nitesh Patel, an economist at Lloyds TSB Private Banking, said: “Someone today would need nearly £300 to have the same spending power of £100 in 1982, meaning someone breaking the million pound mark 30 years ago would have the equivalent of £3m today.
“Looking to the future, even if inflation is kept firmly under control and rises only in line with the Government’s target, it is likely that the value of money will continue to reduce significantly and decline by more than half its value by 2042.”
The results will be particularly for poignant for savers who have seen their nest eggs attacked by inflation in recent years. Returns on accounts, which should protect the value of savings, have been rock bottom for nearly four years.
Falling sterling, which has come under fresh pressure after a credit downgrade by Moody’s on Friday, has also been in long-term decline against many countries, which erodes the buying power of holidaymakers and those looking to move abroad.
|Everyday goods||Price in 1982||Price in 2012||% change|
|Draught lager, per pint||73p||£3.18||336%|
|Bread, white loaf, sliced,||37p||£1.24||235%|
|Apples, per kilo||68p||£1.75||157%|
|Milk, pasteurised, per pint||20p||46p||130%|
|Sausages, per kg||£1.59||£4.40||177%|
|Butter, per 250g||50p||£1.38||176%|
|Carrots, per kg||35p||86p||146%|
|Sugar, per kg||44p||98p||123%|
|Coffee, instant, per 100g||97p||£2.68||176%|
|Eggs, per dozen||73p||£2.82||286%|
|Vehicle fuel, ultra low sulphur diesel, per litre||36p||£1.42||294%|