News recommended

State Pension: 20% Rise in Pensioners’ Cost of Living/ 10.2.2012• A. Velasco• Posted At 12:00 PM

While the population as a whole has been suffering under soaring inflation rates, the ‘silver inflation’ rate, or the real rate of inflation that pensioners are experiencing, has been rising far higher than the national average.

Many pensioners are now experiencing a cost of living rise of nearly 20% since 2008, according to recent research from advocacy group Age UK. Meanwhile, the average inflation hike for the general population is just 13% over the same period of time.

The news comes as the government, advocacy groups, and charities are all urging the British population to proactively save more for retirement. Those who wish to contribute further to their future can seek out stakeholder pensions and other private investment options from providers such as
Virgin Money

Gas and utilities

The news that pensioners are suffering comes as no surprise, as pensioners spend a larger percentage of their income on the commodities that have surged the most in recent years: electricity, gas, and food. In fact, gas tariffs have risen by an astonishing 25.3% in the past year. Electricity has risen by 15.5%.

The pain of these higher tariffs is felt most by pensioners who have a smaller savings egg to fall back on, particularly pensioners who rely on the state pension for the majority of their income.

Over-55s now need an additional £978, while over-65s will need £1,111 more a year to maintain the living standards they had in 2008. The state pension rise of this year will pay less than £300 more to a single pensioner. For couples, the state pension has increased just 12.6% since 2008, though they experience 18.96% inflation.

Cuts to the most vulnerable

In addition, the over-80s in the UK have taken a hard hit towards their Winter Fuel Payment, which has decreased from £400 to £300 this year. Younger pensioners saw a cut of £50, down to £200.

Add these cuts to devastatingly low interest rates on savings, and we get a recipe for an impoverished retirement that is plaguing thousands of pensioners today. This is made tougher by the continual threat of a state pension age hike, another method of cutting costs and easing the budget deficit.

The grim news for pensioners has led to campaigns both for more help for the elderly, and more savings on the part of British workers. Saving now could mean the difference between retiring in poverty and retiring with financial independence.

Read More Pension News

Interested in speaking to a qualified professional about your pension and annuity options? Fill in our quick pension enquiry form



Leave a comment

All comments are moderated

You have to be logged in to post a comment.

  • Recommend Us - With Google Plus One