Inflation has soared relentlessly higher in recent months, and pensioners may struggle to stretch their income far enough to cope with rising costs, a financial expert has warned. Britain’s retirees may face tough choices in the months ahead.
Mel Wright, Money Expert at Rest Less, explained why pensioners often feel the impact of inflation more severely.
She said: “Those who are hardest hit by rising living costs are invariably those on lower incomes, which includes pensioners, many of whom have to get by on their state pension alone.”
At present, the full new state pension is worth just £9,339.20 per year, although some will get less.
This will rise from April 2022, but only by £288.60, which may not provide much relief for older Britons.
This was done because they believed the average earnings growth figure was unusually high due to the ending of the furlough scheme.
Pensioners were therefore denied what would have been by far the biggest boost to their state pension income since the triple lock was introduced a decade ago.
The rate of inflation was used instead, which is how the 3.1 percent increase for 2022/23 was arrived at.
Unfortunately for pensioners, inflation has surged of late, up to a 30-year high figure of 5.4 percent for the year to December.
This means the cost of living is higher and at the moment, is outpacing the amount their state pension income will increase by.
Ms Wright believes pensioners face a potentially perilous situation as costs rise and their state pension struggles to keep up.
She said: “If we’re talking about energy bills alone reaching £2,000 a year for an average household in the months to come, that’s a fifth of their income gone just on heating their homes.
“It’s little wonder therefore that we hear about many pensioners and others on low incomes having to make the horrific choice between heating or eating.
“Let’s not forget that energy bills are just one cost that’s rising – pensioners are also seeing their weekly food bills soar.”
She went on to point out that people are also facing higher council tax bills as well as steeper telephone and broadband bills.
She continued: “Unfortunately this could just be the tip of the iceberg.
“Inflation was higher than expected at 5.4 percent in December, and could well rise further from here, piling yet more pressure on those already struggling to cope with the cost of living crisis.”