Only way is up! …but you can fight rising price by following our expert tips and save a few bob while you’re at it

Atorrent of pent-up spending power is being unleashed as we exit lockdown. Now we can go to the shops, travel and spend money on our favourite activities, we are splurging on pretty much everything, driving up prices. Adding to the inflationary pressure of other factors like higher oil and gas prices and the trillions of extra euros, yen, pounds and dollars being printed by central banks around the world to kickstart post-Covid economies.

The rate of change in the Consumer Price Index went from -1 in January to +1.6% annually in June, the latest figures showed this week.

Housing, electricity and energy fuels were already up by nearly 5% in the year to June while the cost of transport (+3.1%), health (+2.4%) and restaurants and hotels (+1.7%) also jumped in the year. But that’s just the beginning. Most energy providers have announced price increases for both gas and electricity at many times the rate of inflation.

This is on the back of wholesale fuel costs going up, which has also led to soaring prices at the pumps recently (with petrol up by 20% and diesel by 22% this year).

Meanwhile, eir this week raised phone and broadband prices, again by many times the rate of inflation.

Luckily, there’s a lot we can do to fight back against rising prices.

In fact, you could easily save even more money than you’ll lose from looming hikes. Here’s how:

PAY OFF YOUR MORTGAGE EARLY

Paying off your mortgage early is the only sure way to ‘beat inflation’.

Inflation of 1.6% means your money is worth that much less every year if left in a bank at zero percent.

It’s value is literally being eaten away all the time.

For example, €10k would be worth €9,840 after one year, €9,527 after three and just €9,225 after five… well, you get the picture.

Paying off an average mortgage of 3.4% means you’d not only beat inflation – but make an extra 1.8%.

It may not sound like much but it’s the best sure-fire savings deal around.

FIX YOUR MORTGAGE

Central banks battle inflation by raising interest rates. That’s their job.

Interest rates are at historic lows but that won’t forever.

‘The next move on interest rates will be upwards,’ said mortgage broker Michael Dowling of Dowling Financial in Dublin, who recommends a longer term fixed rate such as Avant Money’s seven-year deal from 1.95% (60% loan-to-value ratio).

Martina Hennessy of Doddl.ie agrees. ‘We are in a period of low rates so it is a good time to consider fixing,’ she said.

‘There are still over 200,000 household on standard variable rates of up to 4.5% who could be reducing their interest rate substantially, even with their own lender, by looking to move from standard variable to a fixed rate.’

‘The range of fixed rates for new mortgage holders varies considerably by lender, for exam

ple at 80-90% loan to value a fiveyear fixed rate can be anywhere from 2.5% to 3%.’

While that’s not as good as the 1.95% rates for 60% LTV mortgages, you could still save tens of thousands of euros over the lifetime of a loan.

‘Green’ mortgages are another new feature of the market worth a look if you have a BER of B3 or

higher. ‘There are some excellent green rates available, most notably Haven Mortgages’ fouryear fixed rate at 2.15% (90% LTV),’ said Martina.

ENERGY

Energy costs are shooting up by up to seven times the rate of inflation. From August, Bord

Gáis Energy is pushing up costs by 12.7% on an average gas bill and 11.6% on the average electricity bill.

That will add over €100 a year to gas bills and €137 to electricity prices from August 8.

This follows price rises from Energia that sees customer bills rise by almost 10% for each a year from July 8.

These hikes are on top of a 4.8% rise in energy costs in the year to June.

Ouch!

But don’t worry, you can save even more than those looming crippling increases by shopping around.

We should ‘switch energy providers as soon as possible to lock in new customer discounts’, advises Brendan Halpin, CEO of WeSwitchU.ie, which does the switching for you.

This way you can not only beat the latest increases – but can save even more money for years to come – up to €2,000 per year on dual-fuel plans for certain house types, he said. ‘Every provider offers much lower rates to new customers and a switch can

be seamless and hassle-free… With our service, you only need to sign up once to be switched to the best rate every year,’ he said.

SAVE WITH

THE POST OFFICE

No deposit account in Ireland will match the latest inflation rate of 1.6%.

But don’t simply give up and accept the rubbishy 0% interest offered by your bank.

An Post pays up to 10% over 10 years for a savings bond, or 3% over five.

Don’t worry too much about the timeframe – your money isn’t really locked away; you can still take it out before 10 years, albeit for a lower interest rate depending on how long it’s been in. Even that is usually a better deal than the 0% on offer from the banks.