Soaring inflation victimises imminent retireesTuesday 22 March 2011
Soaring inflation victimises imminent retirees
- Inflation for 50-64 year olds higher than today’s CPI at 4.6%
- Saga calls upon the government to reintroduce inflation-linked certificates as pensioners battle the rising cost of living
Inflation has soared for people over 50 as a result of rising transport, food, water and fuel costs and for those approaching retirement, in their 50s and early 60s, inflation is higher than the national average new research from Saga reveals.
Dr Ros Altmann, Director General Saga has described older savers as “innocent victims" of recent monetary policy and, while inflation remains well above target, she heavily criticises the lack of action on interest rates.
“This is a disgrace, yet another sledge hammer blow for savers as inflation continues to erode their income. And it is those approaching retirement who are the worst affected – the very group who need to save most. Just what is the Government going to do about it?”
The annual consumer price index (CPI) inflation was 4.4% in February 2011, up from 4.0% in January 2011.
Saga calculates that annual inflation was as follows for the over 50 age bands in February 2011:
50-64: 4.6% up from 4.2% in January 2011
65-74: 4.3% up from 3.9% in January 2011
75 and over: 4.2% up from 3.7% in January 2011
In response to the new figures, Saga urges the Government to bring back inflation-linked National Savings certificates for over 50s, after demand for the products exceeded expectation and they were withdrawn in July.
Ros Altmann, said: “Anyone trying to live off their savings or on fixed incomes will be suffering from the effects of inflation. The Government should bring back the inflation-linked National Savings certificates which were recklessly withdrawn last year.
“If inflation continues rising there is a significant risk that inflation expectations will start feeding through to wages, which sets up the kind of wage-price spiral that has been so damaging to price stability in the past.
“As we look to tomorrow’s budget, the Government simply cannot afford to ignore the needs of the UK’s 21 million over 50s population.”
This research was put together for Saga from The Centre for Economics and Business Research ltd, March 22nd 2011
Analysis on key findings:
· There are important differences in the factors contributing to the annual rates of inflation for these age bands. Rises in food, water and fuel prices have pushed up the inflation rate for those aged 65-74 and 75 and over, while transport costs continue to contribute heavily to inflation for those aged 50-64.
· For the over-75s, food price inflation contributed 1.3 percentage points to the overall 4.2% rate of inflation (compared with a 0.7 percentage point contribution for the UK as a whole). Food prices in February 2011 were 6.2% higher than in February 2010.
· For those aged 50-64, transport costs contributed 1.5 percentage points to the overall 4.6% rate of inflation (compared with 1.3 percentage points for the UK as a whole). Transport prices in February 2011 were 7.9% higher than in February 2010.
Dr. Ros Altmann on 07545 504 513
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