Pensioners hit by 20pc jump in living costs as household bills soar

The elderly are being hit hardest by price rises, with a ‘silver inflation’ rate which far outstrips that faced by the rest of the population.

For many pensioners, the cost of living has risen by nearly 20 per cent since 2008.

This means they are having to find an extra £1,000 per year to maintain the same living standards.


It compares with average UK inflation of 13 per cent over the same period.

The fact that older people spend a greater proportion of their income on heat, electricity and food means they have been hit hardest by surges in the price of essentials.

Gas tariffs have leapt by 25.3 per cent in just the past year, while electricity is up by 15.5 per cent.

The research, by Age UK, shows a silver inflation rate ranging from 16.97 per cent to 19.07 per cent since 2008.

For those aged 65 to 69 the figure is put at 18.67 per cent, which equates to needing an extra £1,111.26 a year to maintain the same lifestyle. In the same period, the state pension for a couple has increased by just 12.6 per cent, equating to an annual increase of around £950.

The over 80s have seen a cut in the Winter Fuel Payment from £400 to £300 this year, while other pensioners faced a £50 reduction to £200.

Those retiring now are also suffering from a collapse in annuity rates, which means the value of the annual pensions they can buy with the money set aside for them is down significantly compared with previous generations.

More...

• Savers and pensioners 'lose out on £44.5bn a year' due to gulf between rates and inflation

The amount pensioners earn on their savings has also been savaged by low interest rates.

Gordon Morris, managing director of Age UK Enterprises, described the surge in living costs for the elderly as ‘extremely worrying’.

He said: ‘Since 2008, an average over 55-year-old has experienced additional costs of £978 per year, which rises to £1,111 yearly for the average 65 to 69-year-old.

The Silver inflation trap.jpg

‘In addition, costs remain high for essentials such as energy and food which, as our silver inflation shows, are items that those in later life spend proportionally more on.

‘At a time when the value of annuities is in free fall and savings generate little or no income, it is extremely worrying.’

Dr Ros Altmann, director-general of Saga, said the hikes in living costs were a life or death issue.

‘Older people remain worst hit by rising costs of living,’ she said. ‘We are deeply concerned about how these abnormally high levels of inflation are impacting on pensioners in particular.

‘Last year, nine pensioners died every hour, due to the cold. With reduced Winter Fuel Payments this year and record high fuel costs, these “excess winter deaths” could rise.’

She added: ‘Policy makers have not fully factored in the dangers of inflation for our nation. Low interest rates on savings and high inflation are robbing older generations of their spending and are hugely damaging to older people’s lives.’

Saga is supporting the Surviving Winter campaign, which is encouraging wealthy pensioners to donate their Winter Fuel Payment in order to help those elderly who cannot afford to heat their homes


Read more: http://www.thisismoney.co.uk/money/news/article-2086488/Elderly-hit-20-rise-living-costs-Pensioners-suffering-household-bills-soar.html#ixzz1jPgs4qz6