Harder hit by inflation
Official figures have confirmed – at last – that inflation is much higher for pensioners than it is for younger people. In the third quarter of 2008 the Office of National Statistics confirms that prices rose by 8.7% for single pensioners and 7.9% for couples. Which is far higher than the official rate of inflation for that period of around 5%. This official recognition of the problem was published a few days after the highly respected Institute for Fiscal Studies worked out that inflation for the oldest poorest households was 9% instead of the official 5%. The reason is simple. People living on low and usually fixed incomes spend more of their money on essentials – eating, keeping warm, and local travel. And over the last year those have soared. Fuel and light rose by 39.6%. Food by 11.2%. Fares and travel by 10.1%. Items that fell in price – clothing and footwear and leisure goods – are things that people on low incomes tend to buy less of or do without altogether when times are hard.

Economists are predicting that inflation will fall rapidly over the next few months. Roger Bootle of Capital Economics believes it will ‘plummet’ by the spring and could reach 1% or even less next year. That will be little comfort to people worrying now about paying their winter fuel bills. And there is little hope those will fall even next year, despite the fact that the price of a barrel of oil on world markets has fallen to around half its peak of $140. Those cuts are not being passed on by the energy companies. They say that is because although prices have fallen gas prices are still 70% higher than last winter and electricity prices are double what they were. They also bought fuel in advance in the hope that would protect them against price rises. As prices have fallen they are stuck with expensive contracts. And, yes you guessed it, the credit crunch means it is more expensive to borrow the money they need from the bank and that cost has to be passed on to the customer.

But there is one pale silver lining to the fact that inflation hit 5% in September. That figure is the one the Government uses to increase the state pension in April. If it keeps to the rules the weekly pension will rise by £4.55 to £95.25. But of course if it had raised it in line with its own official pensioner price index it would have risen by £7.90 to £98.60 a week. Somehow that seems unlikely. After all, there are banks to bail out.

Is my money safe?
The crisis in the world’s banking system – especially the collapse of the Icelandic banks Landsbanki (trading as Icesave in the UK and also the owner of Heritable Bank) and Kaupthing (which had the UK account Kaupthing Edge) – has left many people worried about the safety of their money. In the three months since I last looked at this question Governments around the world have been raising the amount of savings that is guaranteed in the event a bank goes bust – something which more than 30 banks have done or narrowly avoided since then.

In the UK the amount of cash in the bank or building society that is now guaranteed by the Financial Services Compensation Scheme was raised from £35,000 to £50,000 on 7 October. The Financial Services Authority is consulting on raising it further, though any change will probably not happen until spring 2009. On the same day finance ministers from the 27 countries in the EU agreed to set a minimum throughout Europe of €50,000 (about £40,000). But many European countries decided to raise their minimum to twice that and there is now talk of a common €100,000 (£80,000) limit throughout the European Economic Area (which is the EU plus Iceland, Norway and Liechtenstein).

The Channel Islands and the Isle of Man are neither in the EEA nor the UK and are not covered by those schemes. Isle of Man has a £50,000 guarantee. Jersey has no guarantee except for those who live there. And Guernsey is – as we go to press – considering introducing a scheme. If you have money offshore then make sure you know how the guarantee works in the offshore country.

Children's books – grown up prices
Children’s books are big business among adults. Old ones anyway. And your bookcase may just contain a childhood treasure – or one inherited from a mother or grandfather – which can be turned into much needed cash.

Crispin Jackson Head of Books at Christie’s South Kensington says children’s books have a special appeal "Everyone read books as a child and they have fond memories. And they have this combination of images and text. Who was responsible for Winnie the Pooh? Was it Milne? Or Shephard? And there is a lot of wisdom in good children’s books."

Christie’s is concentrating on the quality of the art in its sale of Children’s Illustrated Books in South Kensington on December 10. Arthur Rackham, who illustrated many children’s books, and Beatrix Potter – who drew her own pictures – feature strongly including some original hand drawn place mats by Potter in ink and watercolour expected to fetch up to £3000. Beatrice Potter books are likely to be first editions if the date of printing is on the front of the same page as the title and author. Firsts can be worth "some hundreds" and the same for a 1926 Winnie the Pooh even in poor condition.

Tax returns
People without access to a secure modern computer and a fast internet connection will have to pay a fine of up to £100 if they did not file their self-assessment form by 31 October. The Revenue has confirmed there will be no concessions for them. The deadline for filing the paper form was brought forward this year from 31 January to 31 October to encourage everyone to file online – the deadline for that remains at 31 January. About half the 10 million people who pay at least some of their tax through self-assessment already file online. So if you have a paper form and did not fill it in and return it by 31 October then you will normally have to join them or face a fine of up to £100. However, the fine cannot be more than the tax owed so if you owe no tax then no fine will be due.

Online filing is relatively straightforward and the HMRC system calculates your tax liability for you so you can make sure you send the right amount by 31 January – which is still the deadline for everyone to pay the first instalment of their 2007/08 tax. If you miss that date then interest at 7.5% a year will start at once and a 5% surcharge added if you still haven’t paid by the end of February.