Inflation up, still not returning to target, but Bank of England persists with QE: Annual consumer price index (CPI) inflation increased to 3.5% for the country as a whole, a very disappointing rise since last month at a time when the Bank of England keeps promising that punishing pensioners and savers with its regime of ultra-low rates and QE can be justified by falling inflation.
Food, housing, fuel all drove inflation up - bad news for pensioners: Even worse for pensioners, the factors which led to the rise in inflation included higher food prices which rose by 4.6% over the year, housing, water, and fuel costs, up 6.2%, electricity which rose 8.1%, and gas 16.1%.
Saga price indices show higher inflation for oldest age group: The Saga Price Index*, compiled by research house Cebr, shows the differential impact of inflation on older age groups, based on the different buying patterns between the generations. Inflation faced by the over 75 age group is higher than for all other age groups. This vulnerable section of society continues to be hit hardest by price rises.
Cumulative inflation for over 50s has risen more than 20% in less than 5 years!: The inflation problems faced by older people in Britain are even more starkly highlighted by focussing on the cumulative inflation increase for over 50s of more than 20% since the September 2007 failure of Northern Rock. The cost of living has risen far more for the over 50s than for the population as a whole, wiping out more than a fifth of the buying power of older people's incomes. Those with fixed annuities (over 90% of people who buy annuities have no inflation protection) or living on savings income will have suffered significant falls in their real income:
On RPI measure since September 07:
• 65-74: 21.7%
• 75 and over: 21.8%
• Whole population (RPI): 15.8%
Pensioners particularly suffering from price inflation: Saga's Retail Price Index (RPI) measure is higher for over 50s compared with the UK as a whole and for those over 65, it remains over 4%.
RPI for March:
• 50-64: 3.9%
• 65-74: 4.0%
• 75 and over: 4.3%
• Whole population: 3.6%
CPI for over 75s also well above rest of population: CPI inflation in March was 3.5%, up from 3.4% in February, but for the over 75s it was 3.8%, the figures are as follows:
CPI for March:
• 50-64: 3.5%
• 65-74: 3.5%
• 75 and over: 3.8%
• Whole population: 3.5%
Dr Ros Altmann said: " Price increases remain noticeably higher for older people than the average family faces and inflation is still eroding the value of fixed pensions and savings. CPI inflation is still way above the official target.
“All odds seem stacked against older people’s finances; high inflation, low interest rates, negative impact of quantitative easing, cuts in savings credits and the latest tax proposal included in the recent Budget. This is not good news and Saga desperately wants to see policy makers give these age groups some necessary respite, rather than ignoring their plight."
NOTES FOR EDITORS:
*Saga created its own Saga Price Indices, with respected research house, Cebr, to explore how inflation is affecting the over 50s because price rises can be felt differently due to different spending patterns across age groups.
Graphs and report available on request