HIGH INFLATION STILL HITTING POORER PENSIONERS’ POCKETSTuesday 13 December 2011
HIGH INFLATION STILL HITTING POORER PENSIONERS’ POCKETS
- Rising fuel and food prices could kill more pensioners this winter
- Saga's figures show pensioner purchasing power has fallen more than 20 per cent since start of the ‘credit crisis'
Dr Ros Altmann says: “Today’s inflation figures are certainly nothing to celebrate. Although some commentators may focus on the fact that there has been a welcome fall in the annual cost of living (from CPI of 5% in October to 4.8% in November) as a result of a recent drop in petrol prices and supermarket price wars, these inflation figures are still dreadful - and, of course still well above the Bank of England’s 2% inflation target.”
Saga is deeply concerned about how these abnormally high levels of inflation are impacting pensioners in particular. Last winter, nine UK pensioners died of cold every hour. In November 2011, the UK’s average electricity prices were 15.5% higher than the same month a year ago, while gas prices were 25.3% higher.
Older people remain worst hit by rising cost of living, as Saga’s monthly Price Index, compiled by research house Cebr reveals that, since the September 2007 failure of Northern Rock, the over 50s have experienced a cumulative inflation rate of over 20%. The cost of living has risen for different age bands as follows:
On RPI measure since September 07:
75 and over: 20.6%
Whole population: 14.7%
On CPI measure since September 07:
75 and over: 16.9%
Whole population: 15.6%
Saga created its own Saga Price Indices* to explore how inflation is affecting the over 50s because price rises can be felt differently due to different spending patterns across age groups. The latest numbers show that inflation on both the RPI and CPI measures is significantly higher for over 50s compared with the UK as a whole. Annual consumer price index (CPI) inflation in November was 4.8% down from 5% in October, but for older age groups, the figures are as follows. Pensioners are particularly hard hit, and this could literally mean life or death for some:
CPI for November:
50-64: 4.8% (5.1% in October)
65-74: 4.6% (4.9% in October)
75 and over: 4.9% (5.2% in October)
RPI Annual retail price index (RPI) inflation was 5.2% in November, down from 5.4% in October. Saga calculated that annual retail price index (RPI) for the over 50s in November was as follows:
RPI for November:
50-64: 6.1% (6.3% in October)
65-74: 6.0% (6.2% in October)
75 and over: 6.2% (6.4% in October)
Commenting on the latest Saga Price Indices Dr Ros Altmann, Director-General of Saga said: “These figures show, yet again, just how damaging inflation is for older people. Especially as a result of sharp rises in heating bills, we are deeply concerned that many more pensioners may die this winter, because they cannot afford to heat their homes properly. 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. Saga is determined to keep trying to help alleviate this problem and we are urging people to support the Surviving Winter Campaign, which will deliver help to vulnerable people across the country who are struggling to heat their homes.
“Policy makers have not fully factored in the dangers of inflation for our nation. Low rates and high inflation is robbing older generations of their spending and is hugely damaging to older people's lives. This has also hit confidence, causing people to cut back on their spending plans, but it is essential that we open up pensioners’ purchasing power as this in turn, will open doors for the young and unemployed. “
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