At the weekend my wife and I drove up to Amble on the Northumberland coast for an impromptu trip out. While at the seaside we indulged in the customary fish and chips prompted by the sea air and the smell wafting at us from a seaside cafe.

Bizarrely this got me thinking about inflation! Inflation and its effect on the real value of money is something that I talk about with clients all the time, whether it's trying to protect savings languishing in deposit accounts with interest rates below the current rate of inflation or talking about index linking life insurance or pension payments it does come up quite a lot. It's often difficult to really get people thinking about the effect.

Why then did chips make me think about inflation, well I'll tell you a story that will give away my age. When I was at senior school in Gateshead my Mam, used to give me £1 for lunch that would break down as 50p for a chip butty, 25p for a can of pop and usually 25p for a cream cake or ice lolly. That was 18/19 years ago, now ignoring the lack of nutritional value for a moment and thinking about the prices, a bag of chips with a bun was going for £2 in the chip shop, probably a little more than most being on the coast but still a four times increase in less than 20 years. Oh, I bought a can of pop too and that was £1.

That's inflation at work; both the chips and the pop now cost 4 times what they did in 1995 when I was at school. Now inflation isn't measured in the cost of chips as I'm sure you're well aware but I thought it was a nice example of how much the cost of living does increase even on things we have always regarded as 'cheap'. So I urge you to ask yourself, have you factored inflation into your long term plans?