Member Article

Bleak outlook for UK pensioners?

New research from a North East building society has revealed the true high cost of being a pensioner. In 2008, Newcastle Building Society Equity Release Service predicts that real inflation for pensioners will be up to 7% - more than double the estimated national inflation rate.

The main areas responsible for this hike are fuel and food, which, according to the weightings of the Government’s pensioner’s price index, account for over one-third (14% and 22% respectively) of all pensioners’ expenditure.

However, fuel and food prices will increase significantly in 2008 - with fuel up by around 15% and food up by 12%. This means that, even if all other items paid for by pensioners retain the predicted inflation rate of 3%, based on food and fuel hikes alone pensioners will fare the worst of all consumers, facing 7% inflation overall.

Bob Mottershead, Retail Sales Executive, Newcastle Building Society, said: “These findings paint a bleak picture for pensioners in 2008. The rising cost of living is undoubtedly a concern for us all; however, commonly it is those in later years who suffer the most. For the many relying on the basic state pension of just £87.30 per week, these increases could negatively impact everyday quality of life.

“There are many ways those approaching their golden years can fund their retirement, and equity release is one such option. Over the past year alone we have found this type of product is becoming increasingly popular as more asset-rich, cash-poor retirees struggle to make ends meet.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .