Inflation: Elderly are hardest hit victims and it's set to soar higher in coming months
Last updated at 10:48 AM on 14th June 2011
A recent report found that more than 60 per cent of people over the age of 50 said their lifestyle had 'crashed' over the past year
Pensioners are being crippled by a higher rate of inflation, a report warns today.
A typical OAP is battling an annual rise in the cost of living of 4.6 per cent – 0.1 percentage point above the Consumer Price Index.
Last night experts said this would rise even further over the next few months because of hikes in gas and electricity prices.
This compares to a ‘real’ inflation rate of just 2.9 per cent a year for the young, or an average for all age groups of 3.5 per cent.
The figures are contained in an analysis of annual inflation over the past three years by the Institute for Fiscal Studies.
Figures published today by the Office for National Statistics will show inflation remains substantially above the Government’s target of 2 per cent.
The IFS said pensioners were hit harder by many of the bills that are rising, but feeling none of the benefits of bills which are falling.
For example, pensioners are badly hit by rising fuel bills, which have doubled in a decade. The average ‘dual fuel’ bill has rocketed to £1,162 a year, forcing many to cut back on their heating because they simply cannot afford to stay warm.
But few pensioners benefit from the fact that mortgage costs have plummeted over the past few years, because the majority have paid off their mortgage.
Dr Ros Altmann, director general of Saga, the old age specialists, said the plight of the elderly was ‘an outrage’.
A STARK CHOICE - HEATING OR EATING?
Families are delaying major changes to their lives as energy and food bills soar, researchers warn today.
One in ten people has put off changing job or moving house while one in 20 has delayed retiring, starting a family or getting married.
The study by consumer champion Which? found that 89 per cent say the cost of energy is their greatest concern, with many facing a stark choice between heating and eating.
Some 83 per cent are worried about the cost of food.
The cost of these ‘must-pay’ bills has soared over the past five years, massively outpacing increases in wages, so squeezing living standards.
In five years, household energy bills are up by 76 per cent, council tax by 18.5 per cent, petrol by 41.7 per cent, and train fares by an average of 29.2 per cent.
Bread has risen by 50 per cent, ham by almost 40 per cent, carrots by a third and bacon by around 25 per cent.
By contrast, the average household’s disposable income fell last year and is expected to do the same again in 2011, following increases in tax such as VAT and cuts in benefits.
Which? executive director Richard Lloyd said: ‘Consumers are most worried about the spiralling costs of energy. There is a limit to how much people can cut their spending on essentials.’
Many pensioners were struggling to survive on a fixed income while their bills soared.
Dr Altmann added: ‘It is so damaging for someone on fixed incomes when prices rise at this rate. Every year, they can afford to buy less and less.’
A recent Saga report found that more than 60 per cent of people over the age of 50 said their lifestyle had ‘crashed’ over the past year. It warned their lifestyle was being crippled by the toxic combination of the high cost of living, record petrol prices, tax hikes and poor pay rises.
Dr Altmann predicts that inflation for pensioners will rise to 6 per cent within months.
She blamed the controversial decision by Scottish Power last week to raise its energy prices by up to 19 per cent, adding almost £200 to annual household bills – a move almost guaranteed to be followed by its rivals.
Michelle Mitchell, of Age UK, said: ‘The threat of higher energy bills is likely to add to the worry and uncertainty faced by millions of older people during the winter months.’
Neil Duncan-Jordan, from the National Pensioners’ Convention, said: ‘Millions of pensioners feel betrayed by this Government so far.
‘Many are struggling every day to pay their bills.’
They are facing a ‘triple whammy’ of a measly State pension, dire interest rates on their savings and the loss of their winter fuel payment ‘top-up’, he said.
The situation is made worse by the fact that the State pension is one of the meanest in the developed world.
A full basic State pension is worth just £102.15 a week, and many are not even eligible for the full amount.
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Here's a thought. I wonder if the masses of young, healthy imports will hang around long enough to reach old in this country?
- John Smith, Anyone remember a country called England?, 14/6/2011 12:57
Makes me angry that this generation has ensured that their grand kids are going to have a considerably worse life than themselves..........and they still want more money. If the world was a fair place, they'd create a new law taxing OAPs.
- Mike, Bristol, 14/6/2011 12:55
What has an under 25 done wrong, to create all this debt? Other than being at school for most of the time it was happening. Old people need to accept, it happened on their watch, and they should be the people paying it all back
- Mike, Bristol, 14/6/2011 12:53
This Government doesn't care about us pensioners ,, They live in there own world they do not know what it is like to have no money,,,
- allan, Edinburgh Scotland, 14/6/2011 12:53
if obvious anybody on a fixed income are going to suffer. working people can often do overtime or extra work
- ron hunt, halifax uk, 14/6/2011 12:53
People who should be paying back the most to the state = over 50s People who should be paying back least to the state = under 25s. As usual with politics, it's the exact opposite.
- Mike, Bristol, 14/6/2011 12:52
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