You are here: Home - Household Bills - News -

Bluetooth speakers and popcorn added to inflation basket

Written by: Danielle Levy
The Office for National Statistics (ONS) has updated the basket of goods it uses to calculate consumer price inflation (CPI) and has added Bluetooth speakers, electric toothbrushes and shop-bought popcorn to its 2019 list.

As part of the move, hi-fi systems, three-piece suites and envelopes feature among the items that are no longer included in the list.

The ONS said the additions reflect the changing habits of consumers. Other items that were added include flavoured tea, sugar free cola, baking trays and non-leather settees. Meanwhile, crockery sets and dry dog food were removed from the list. Dry dog food has been replaced with dog treats.

This year, the ONS added 16 items to the basket, removed 10 and modified 16, leaving 688 unchanged.

Philip Gooding, a senior statistician at the ONS, said: “We want to reflect modern spending habits, and the alterations we have made highlight shifting consumer behaviour, whether that is in technology, the home or the way we communicate with one another.”

Investment platform Hargreaves Lansdown pointed out that unit trust initial charges have also been dropped from the ONS’s list, which reflects the industry’s focus on ongoing charges.

“It’s just one of a number of changes to the basket this time that you’d be forgiven for assuming had already happened – such as the switch from old fashioned Hi-Fis to Bluetooth speakers, and the dropping of envelopes from the basket, because more of us have turned to email,” explained Sarah Coles, personal finance analyst at Hargreaves Lansdown.

She noted that there are plenty of items that have remained in the CPI basket which belong to another era.

“Whether that’s CDs and DVDs, dating agency membership, gas fires, chicken kievs or liver,” Coles said.

“The same goes for your finances: there’s a good chance you’re hanging on to outdated and expensive products long after something more modern and effective came along. So it’s well worth considering what you ought to ditch from your own portfolio.”

Hargreaves Lansdown highlights these four types of products:

  1. Child Trust Funds

If your child was born between September 2002 and January 2011 they’ll have been given a Child Trust Fund. These were then phased out when Junior ISAs (JISA) came on to the market. Nowadays they tend to offer lower interest rates than the JISA, while investment CTFs tend to be more expensive, and have less choice. Since 2015 it has been possible to switch a CTF to a Junior ISA.

  1. Old instant-access savings accounts

Around 80% of people haven’t moved their instant access cash account for three years, and according to the Financial Conduct Authority, the longer you leave your money in an account, the lower the interest rate you’re likely to receive on it. Money in savings accounts opened within the past two years pay an average of 0.82% more than those that have been open for over five years.

  1. With-profits funds

These products were tax-inefficient, opaque, they came with unclear charges and market value reductions when you needed them least, so if you are still invested in one, Hargreaves Lansdown believes it is well worth considering a move. However, you will need to consider the costs, tax and loss of guaranteed rates of return before transferring or cashing in.

  1. Old personal pensions

Older pensions (particularly those around before 2000) charge more for less, compared to modern versions, so it’s worth exploring your options. At the same time, you may be able to consolidate a number of smaller pensions into one so it’s easier to manage in future. However, it is also worth checked whether you are entitled to benefits that were offered within some of these older pensions – such as guaranteed annuity rates.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
The hidden car insurance costs and how to avoid them

Insurance companies are charging drivers hidden fees for making changes to their policy, cancelling their cover and even for renewals.