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Cost of living rises faster for pensioners

05/07/2008

Pensioners have seen a 36 per cent increase in the cost of goods and services over the last ten years, faster than the rate of inflation, research has found.

Insurer Clerical Medical said the increase in retail price inflation is 32 per cent, meaning the cost of living for retirees is increasing at a faster pace.

Rising housing costs have been a key driver behind pensioner inflation in the past decade with a 69 per cent increase, the report found. Housing costs account for a quarter of a pensioner's income.

Increases in council tax (89 per cent) and repairs and maintenance (84 per cent) were the key factors behind the rise in housing costs.

Martin Ellis, chief economist of Clerical Medical, said: "The average cost of living facing pensioners has risen by more than one-third over the past decade.

"The cost of living for pensioners has increased by more than that for all households during the period, particularly in the last five years.

"Higher housing costs have been the key factor behind rising living expenses, accounting for a quarter of the total average weekly expenditure of a typical pensioner household," he added.

The report also found pensioner inflation has increased sharply in the past two years, with the price of goods and services bought by the typical pensioner household rising by 8.8 per cent in the two years to the first three months of 2008.