Pensioners are still suffering in retirement despite the inflation drop: MGM Advantage, enhanced annuity specialists, state. December’s slight fall in inflation didn’t go anywhere near far enough to help financially struggling pensioners and their cash-strapped households, Aston Goodey, sales and marketing director of MGM Advantage has said. Mr Goodey pointed out that unfortunately inflation is still well above the required Bank of England 2% target and UK households generally will still need to find an additional £38bn to have the same standard of living as a year ago.
For households where the principal occupants are aged between 65 and 74, the corresponding additional amount is nearer £3.27bn and where they are aged 75 or over, it is around £2.15bn.
Inflation, as measured by the CPI, fell to 4.2% in December last year, down from 4.8% in November, which shook up economists who now fear that future inflation could fall even further, pushing the country into a recession and a deflationary period. However, Mr Goodey suggests that inflation continues to have a big effect on the finances of retirees, and, given the fact that individuals are living longer these days and their retirement incomes are falling, more people face an uncertain financial future. Indeed, data from MGM Advantage show a so called typical UK household would need to spend an additional £1469 each year to maintain their standard of living from twelve months ago.
Ros Altmann, of Saga, who offer a pension annuity service, said the recently released inflation figures were actually nothing to celebrate, and that the figures are still dreadful, especially for older people, who are suffering financially more than anyone. She added that inflation for the over 50s age group is still around 5.5% as measured by the RPI, well above the UK’s average of 4.8%, principally becuase the costs of goods and services that older people rely on are more expensive than goods and services younger people rely on – the cost of heating your home, for example.
Ms Altmann added that it really is imperative that prices continue to fall, as these high levels of inflation are actually damaging general consumer demand and pushing more retirees into poverty, and this will weaken the economy overall and damage job opportunities for the young and unemployed. The trouble is that falling inflation is good for some folk, but not for others.
