You can’t eat a ‘real return’ but rising income from disciplined dividend investment can pay for a pleasant retirement. This beats  having your standard of living cut in half by inflation when you are too old to do anything about it. That’s the dismal prospect facing many people preparing for retirement with life savings that lack protection against the insidious effects of inflation.

Even apparently small reductions in the purchasing power of money can have big effects over the 20 years or so that the typical pensioner may expect to spend in retirement. Politicians and everyone working in the public sector need not trouble their heads about any of this, because their defined benefit pensions have inflation-protection subsidised by the good old taxpayer. But everyone in the private sector, who must pay for our own retirement with defined contribution pensions, had better think about how we can preserve – or even increase – the purchasing power of our savings.