Couple of days into a recent holiday in the USA, my wife and I drove inland to the small-ish town of Clermont, located in Florida’s Lake County region. Approaching via the I-50 highway, we took a well-signposted turn into town where we parked (for free) around 100 yards from Lake Minneola. The directions to the restaurant where we planned lunch were straight forward, so off we set on foot.
The setting was beautiful; the weather what you would expect of mid-Florida in late March – warm, sunny, barely a ripple on the lake. Most of the ‘snowbirds’ (people who travel to tropical Florida from Canada and northern USA for the winter months) had left for home, creating ample space for locals and a smattering of visiting tourists like us to enjoy a quiet, peaceful, setting. Except, that is, for the sudden, unexpected appearance of a small seaplane which landed on the lake. The ease with which the plane touched down suggested the pilot had successfully executed this manoeuvre before.
Elsewhere, dozens of chirruping purple martins made themselves noisily evident, as they no doubt felt entitled to after travelling more than 5,000 miles from South America to mate in the US during the spring months. The birds are the beneficiaries of local authority largesse, nesting in human-built bird houses , each handily numbered. Was that for the migrating birds or the convenience of tourists and locals? Whatever. Our purple martin-related conversation continued as we entered the restaurant and were promptly led to our table overlooking Lake Minneola.
From here, in a room around two-thirds full, the lakeside view was even more stunning, the heat expelled by effective electric fans rather than air-conditioning, creating a pleasant, relaxed atmosphere, perfect for outside dining.
Some time later, and still inwardly reluctant to move from such an idyllic location too soon, after ordering a second coffee, I finally asked for the ‘check’.
Considering we didn’t drink anything alcoholic (I was driving, after all), the bill was a shade pricey, but in addition to food, you must expect to pay for the view as well as the service, which was, well, okay. It was while reviewing the bill that three numbers caught my eye: 15%, 20% and 22%. I must have appeared perplexed, for our waiter came across and explained the figures – they were the recommended gratuity rates.
We last visited the States about seven years ago when an acceptable gratuity was somewhere between 10% and 12%. Last month, however, I took the hyper-inflationary 67% increase in gratuity rates on the chin. I pressed the button adjacent to the 20% tip figure and hey presto, our $52 bill was in excess of $60.
Inflation’s impact can be steady or, as was the case above, dramatically sudden. For example, the Bank of England estimate that between November 2020-25, UK food costs rose by 38%; over the past 12 months, the cost of family food staples has rocketed. Then there’s fuel inflation; during March and early April, fuel costs rose by an average of 40%.
Little wonder that the left-leaning Resolution Foundation note that living standards are experiencing a sustained decline, the primary cause of which, they say, is inflation and steadily rising costs.
This is worrying news for those on the cusp, or already in, retirement, added to which has been the often stomach-churning volatility displayed by stock markets over the past few months.
For those fortunate enough to be the beneficiary of a defined benefit, or ‘final salary’ pension, ie one that guarantees an income for life, based upon salary and length of service rather than investment performance, putting retirement on hold has become a widespread default position during the first quarter of 2026. As a result, many folks with defined benefit pensions are opting to work a little longer before retiring.
People with defined contribution (DC) pensions, i.e. those where their value is determined by:
a) the level of pension contributions and b) investment growth over the longer term
…will know that valuations are not guaranteed.
Indeed, if holders of DC pensions are already retired and ‘drawing down’ to fund their everyday expenditure, they may find themselves in an invidious position: selling assets such as investment funds or shares as their respective value falls can cause a significant amount of damage. In particular, this process highlights the fact that, unless advance provision is made, for many DC pensioners, their income does not rise in line with inflation.
Older people, especially those who have already retired, may feel they have few alternatives but to accept inflation’s corrosive impact, yet this is not necessarily the case. Many of those aged 55 and above have opted for a relatively straight forward solution designed to ease their financial situation.
Equity release enables older homeowners to release a proportion of their home’s value as a tax-free lump sum. For a sizeable number of people, releasing equity could provide a welcome cash cushion – generating money with which they can counter the inflation’s caustic impact and bring much-needed relief to their finances, often by supplementing existing pensions.
Whichever option older homeowners opt for, the subsequent boost to their disposable incomes could offer a longer-term financial lifeline.
Releasing equity is a big decision and no-one should embark on the process without taking qualified financial advice. Equity release can affect the value of your estate and have an impact upon your entitlement to means-tested state benefits, so consulting with an adviser who can explain these implications in greater detail makes enormous good sense.
As my wife and I experienced during our recent United States sojourn, the sudden application of a large (in percentage terms), unexpected surcharge can happen at almost any time. Closer to home, as higher prices remain likely, dampening demand and economic growth, it would be folly to suggest that UK inflation has been conquered.
