So an investment at 8% p.a. less 5.3% inflation less 18 - 20% tax may give me a nett return of just over 2%? Is it really worth it?

Many elderly people are in financial trouble because of this. When they grew up inflation was not an issue and one could "save for your old age". However if you are dependent on fixed deposit interest for an income, specially in a low interest cycle you will not earn much. When interest rates rise, inflation rises even more, so you are in a catch 22 situation.

Blessed are those who made provision for their retirement by investing in inflation linked investments such as properties or businesses. Rental income that grows with inflation or recurring annuity type of income is a good hedge against fluctuating interest rates and inflation cycles.

Pity I did not know this when I was younger!