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Age UK - Over-55s face £984.28 additional annual living costs
Over-55s faced additional living costs of £984.28 per year since 2008 due to inflation. This is despite gap between inflation for over 55s and the general population narrowing in Q2 2011.
Latest findings of the Silver RPI published by Age UK Enterprises, the commercial services arm of charity Age UK, show that since 2008 the extra increase in prices measured by the Silver RPI, relative to the Headline RPI, is now costing the average over 55 year old an additional £984.281 per year, when compared to the population as a whole.
The gap between inflation experienced by the general population and those in later life since 2008 is in part due to the impact of a low interest rate environment. This reduced mortgage payments for the majority of homeowners but benefited those in later life less because they are less likely to carry mortgage debt.
Commenting on the findings, Gordon Morris, Managing Director, Age UK Enterprises said: 'The fact remains that since 2008, people in later life have consistently experienced price rises at a far higher rate than Headline RPI. At an age when significant long-term financial decisions are being made, the Silver RPI is crucial to helping people better plan for their future costs.'
While three year trends demonstrate how cost rises worse affect those in later life, there has been a slowing of inflation for over 55s in the last three months suggesting those in later life are perhaps not as financially insecure as first thought. Over 55s have experienced inflation at 0.27 percent below Headline RPI since March 2011, which in monetary terms suggests this age group is £53.222 a year better off for this period. However, this improvement does little to change the three year trend, which shows that cost rises have worse affected those in later life by £984.28 more than the population as a whole since January 2008.
Gordon Morris continued: 'It is of course welcome news that Silver RPI for March to June 2011 shows a lessening of the gap between Headline RPI and cost rises experienced by those over 55. But it is still important to help those in later become "smarter" consumers, particularly when it comes to financial products and services. This is why we are committed to supporting consumers to shop around so they buy the best value deals and the most appropriate products for their needs.'