Money value 'falls 67% in 30 years'
Filed under: News
The value of money has plummeted by two thirds (67%) over the last 30 years as the cost of everyday goods has rocketed, research has found.
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.
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Research from Lloyds TSB Private Banking found 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 3.7% 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 £3 million 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."