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12 April 2011
Michelle Mitchell, Charity Director at Age UK, said:
“Although inflation has fallen slightly, RPI – which we believe is a better measure of pensioner inflation – is still 5.3%, far higher than this week's 4.5% increase to the basic state pension. Other benefits including the state additional pension still won't rise in line with inflation because they only go up by 3.1% in line with last September's CPI.
“In fact, even the standard RPI can understate older people's living costs. Age UK Enterprises, the commercial services arm of charity Age UK, has created the Silver RPI, to better reflect the impact of inflation on those in later life. Since 2008 this has shown inflation has been higher for older people than for those under the age of 55. This is due in part to the impact of low mortgage interest rates which do not have as great an effect as those in later life as they are less likely to carry mortgage debt, and cost increases on products and services such as food and energy that over 55s spend proportionately more on.
“With pensioner incomes failing to keep pace with the rising cost of living, many older people will be finding it difficult to afford the basics, let alone anything else. To help older people make the most of their money and claim the benefits they are entitled to, Age UK is launching the Let's Talk Money campaign this week. To find out more go to www.ageuk.org.ukor call Age UK's free advice line on 0800 169 65 65 for a free Let's Talk Money advice booklet.”