Inflation, identity theft, plastic beats cash, investing in modern art, diamond found.

Inflation
How far have prices risen in the last 15 years? The simple answer provided by the Retail Prices Index is that you need to spend £162 today to buy what £100 bought in 1989. But new research by Halifax shows how varied these price rises are. For example, if you smoke you probably don’t need to be told that the price of cigarettes has more than trebled in the last fifteen years, the biggest rise of all the items in the Halifax list. In contrast the price of equipment like TVs, hi-fi, radios and walkmen has fallen in the last fifteen years – now costing barely a quarter of what you paid then. Generally, while the ‘stuff’ we buy has gone up by just over a third the cost of services has nearly doubled. For example, the cost of a car has hardly changed in fifteen years but the cost of running it has more than doubled, with repairs up 126% and fuel up 113%.

If you rely on the state pension, then that has gone up by slightly more than inflation – from £43.60 a week in 1989 to £79.60, a rise of 83 per cent. But council tax and rates have also more than doubled in this period, although mortgage interest payments have only gone up by about 55 per cent. The cost of maintenance and repairs has gone up 147 per cent. So if you spent £100 on keeping your house in order in 1989 you would have to spend £247 this year. . If you heat your home by electricity the price has risen by just 20 pence in the pound and gas is up by nearly a third; but the cost of oil has nearly doubled for oil. Posting a letter is nearly 60p in the pound more expensive but calling on the phone is 9 per cent less than 15 years ago. And while £100 worth of women’s clothes in 1989 would now cost just £66.50, men’s clothing has fallen less – down to £91.50.

Plastic takes over
By the end of this year it will have happened. For the first time in history we will spend more money using plastic rather than cash - £269 billion as against £268 billion – according to the Association for Payment Clearing Services.

It’s hardly surprising. Between us we have more than 160 million plastic cards – about three and a half for every adult in the country and three times the number we used just ten years ago. If you melted them down they would form a block 25 feet long, 25 feet wide and 25 feet deep. It has not taken long. Credit cards only date back fifty years.

In addition more than half the cash we spend, £144 billion, was taken out of cash machines in 2003 using, yes, plastic cards. The average amount taken out was around £60. But there is a big trap here. Around £6.6 billion of this cash was taken out using credit cards. Which is not a good idea. The card issuer will charge you a cash handling charge – normally £1.50 to £2 – and a higher rate of interest, typically 20 per cent or more on the cash you take out. There is no charge when you use a debit cards although if you draw out foreign currency abroad there will be a small cost.

Identity thieves target bins
Who are you? Or more to the point, how many of you are there? There may be more than one. It is not only foxes who go through your bins when you put them out at night. Thieves are there too, looking for documents with your name and address on.

If you have tried to open a bank account recently or applied for a credit card you will know that nowadays they want more and more bits of identification. Including electricity bills and bank statements with your name and address on. These documents are used to verify your identity. And for thieves they are gold dust – the route to a false ID.

Identity theft has become Britain’s fastest growing crime. Last year nearly £30 million was stolen on plastic cards where it was the identity rather than the card that had been stolen. That figure is 45 per cent up on the year before. The frauds can even be done using the identities of people who have died recently. In 2003 16,000 families discovered that a relative’s identity had been used after death to open accounts and get loans. Overall the Home Office estimates that £1.3 billion was stolen through identity theft in 2002.

Once fraudsters have stolen the identity, the fun begins – for them. They can use your details to obtain credit, open a bank account, get a mobile phone, buy things over the internet or in High Street shops. The first you will know is when you get the bill or the credit agreement. Usually beginning ‘Thank you for purchasing/taking out a loan with X, your monthly payments will be…’ That’s when the cold shiver goes down your spine.

But don’t panic! You are not liable for agreements fraudulently made in your name and you do not have to pay. Call the company concerned and explain who you are and that you have not made the agreement. It will take time and effort and just as with a burglary, victims often feel violated.

You can help stamp out ID fraud by taking care of all your financial and personal information. Take your card to the till and make sure it is only swiped once. Never discard the receipts you get when you pay by credit or debit card, some of them contain card details and never throw your old bills or bank statements in the bin or the recycling bag. Even junk mail can be used. So tear the address and numbers into little bits. Or better still shred the whole document.

Stumbling on a fortune
It’s not the world’s biggest diamond. But at the size of a small mobile phone and weighing more than an ounce and a quarter – 182 carats – it is probably one of the largest dozen ever found. The stone was discovered by a 25-year-old freelance miner from Guinea close to the border of three of the world’s poorest countries – Guinea, Ivory Coast and Liberia. He managed to hand it over to the authorities without suffering the fate of other miners who have chanced on large stones. But such is the fear and secrecy surrounding the find, no-one will name him.

A top official with Guinea’s Aredor diamond mining company told Associated Press "It's a quite brilliant diamond, of good enough quality despite having numerous veins. It's worth millions of dollars" The diamond is now under guard in the Central Bank in Guinea’s capital Conakry. The government and various intermediaries will get the biggest share, but the young miner should at least get a small percentage of its value. Very welcome in a country where most of the population survives on a dollar a day.

The largest diamond ever found, the Cullinan, was 3106 carats (1lb 6oz). It was cut into nine major gems. Two of them, the Great and Lesser stars of Africa, can be seen in the sceptre of Edward VII and the British Imperial State Crown in the Tower of London. [PICS – suggest HMG for pics of either of these two. NB it is the British Imperial State Crown not any other crown. The diamond are also known as Cullinan I and Cullinan II. Images I have found have been very poor.]