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Inflation hitting elderly the hardest

Inflation hitting elderly the hardest

Category: Savings

Updated: 14/09/2011
First Published: 14/09/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The elderly have been labelled the 'silent sufferers' of the current economic turmoil after it was revealed inflation is higher for people over 50 than for other age groups.

New research by Saga shows that since the start of the credit crisis four years ago, the cost of living has risen by 13.9% for the population as a whole.

But with spending patterns varying across households, inflation rates naturally differ across age groups.

Breaking the nation down into various age bands reveals those aged 50-64 have seen their cost of living rise by an average of 17.7%.

Those who are 65-74 years old have seen their living costs rise by 19.1% in that time, while anyone over 75 has seen costs increase by 19%.

Not only is life much more expensive for those in their advancing years, low interest rates mean the amount of income that can be derived from savings is dwindling too.

"Their savings have been shot to pieces and they are being burdened by soaring inflation," said Dr Ros Altmann, director general of Saga.

"Older people are trapped. They cannot spend with living costs rocketing through the roof and they're often stuck with rising unemployment and low interest rates battering their hard earned savings."

The warning comes after research from Moneyfacts.co.uk revealed the extent of the struggle facing anyone searching for an inflation-beating savings account.

The research showed a basic rate taxpayer needs to find a savings account paying 5.63% per annum in order to stop their savings pot effectively eroding away, of which only five are currently available.

The impossible task for a higher rate taxpayer is to find an account paying at least 7.5%, while there are also no accounts that can beat RPI.

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