The two things that look as though they could seriously derail the economic recovery in Britain are high inflation and oil prices. It is thought by some economists that the recovery will be contingent on consumer confidence returning. This is because consumers need to at least think that they are able to spend in order for to deliver the boost from retail that it is believed that the economy needs.

With incomes falling against prices it seems unlikely that a retail bonanza is just around the corner. It is the largely the skyrocketing price of certain commodities that will keep prices rising faster than the spending power of consumers. Oil obviously is a major part of this, with the trouble in Libya continuing to add volatility to the situation.

Of courser it is not just the price of oil that is on the up. The cost of fuel is factored into the price of many other commodities. The price of cotton, for instance, has been seeing unprecedented rises. This means that clothing is set to become more expensive – although when it comes to retail, the cost of raw materials is always a tiny fraction of the price on the tag.

While rising commodity prices may be bad news for the economy overall, for canny investors they can provide as solid a bet as you could hope for – even though it is still a bet.  If you think that the price is going to carry on rising and want to get in on the oil action there are a few options open to you.

For some direct investment exposure to crude oil prices so called ETF or exchange traded funds are popular. These are traded as shares, but one that reflect the fluctuating price of the asset – for instance crude oil. The situation for buyers is not so clear cut though and there are pitfalls that can befall the casual investor.

A perfect example of why it can be better to pay for investment  portfolio management rather than going it alone can be found in what traders call the ‘Contango Effect‘. This is when the prices for future delivery for oil turn out to be higher than the present oil price. If funds invest in near-term futures contracts then this can cause the value of the funds to take a hit.

The alternative to direct exposure is to buy shares in energy companies. This is potentially a high risk strategy, as events like the Gulf oil spill can have a catastrophic effect on share prices. On the flip side, these companies always seem to bounce back and keep on making money, so perhaps these temporary dips in confidence represent a good chance to get on board with some cheap stock.

For those who have invested to funds,some exposure to the price of oil is all but inevitable. Almost a third of the FTSE index is made up of resource companies and commodities. Well known funds that invest particularly heavily in oil are the BlackRock World Energy fund and the BlackRock Commodities  Income investment trust.

According to an investigation by the Investigation for Fiscal Studies, household in the UK are set to see living standards fall by the largest amount since the ’70s. ‘Real income’ is  what is left after the effects of inflation have been taken into account. Over the threee years leading up to the end of this one – these figures do not look good.

During the last 50 years ‘real incomes’ increased by an average of 1.6% every year – which works out as 5% over a three year period. This three year period has seen a drop in real incomes of a shocking 1.6%. This is the first time that there will have been a drop over a three year period since 1990.

So what does this mean for the so-called average household? According to the IFS it means over a thousand pounds over the three year period, at £360 a year.

The causes of the slump are believed to be varied. On one hand employment has been suffering. When there are higher levels of unemployment it is easier for businesses to either reduce wages or not increase them. The reluctance of consumers to switch bank accounts may be partly responsible, as income form interest on savings is also taken into account by the IFS calculations.

The Governor of the bank of England Mervyn King has been quoted by the Telegraph as saying that the VAT increase as well as other inflationary pressures meant that he was predicting that prices would exceed pay again this year. This was put into further grim context by the top banker by his pointing out that it would be the first time since the great depression of the ’20s that such a sharp fall in living standards would have been seen.

No-one like to think about it, but the simple truth is that any one of us could die at any point. Obviously there is no point losing any sleep over this basic fact of life, but financially it is something that you should prepare for.

Even if you think that your assets do not amount to much you should think about writing a will. If you do not have a will and you die then it is the law that says where your money and possessions will go. This means that these may well not be distribute in the way that you would have liked.

There are tax implications to not making a will. By drawing up a will it is possible to minimize the amount of tax that your family, or those you choose to leave your estate to, will have to pay. By cutting down on the amount of tax that you will have to pay you will be making sure that those you wish to look after will get more.

For unmarried partners, if they register a civil partnership, it is possible to make inheritance arrangements that will not create financial headaches should the worst happen. It has become easier to write a will in recent years and there is not even a legal requirement to have a solicitor involved.

There are DIY will writing kits and even on-line ‘will writers’ that can be used. Unfortunately the situation can often be much more complicated than it might appear at first sight. There are several reasons why getting help from a solicitor could be a good idea when writing a will.

There kind of complex situations where receiving professional help in will writing vary. They include where there is the need to make provision for a dependant who is unable to care for themselves. If you have any property or assets over seas, or if you are not a British citizen having a lawyer look over your will is a must – and the same can be said if your permanent home is outside of the United Kingdom.