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Cost Of Living Outstripping Pensioners’ Incomes

Cost Of Living Outstripping Pensioners’ Incomes A study by insurance company Clerical Medical has found that the cost of living for pensioners over the past decade has risen faster than inflation. This makes it harder for them to get out of debt.

The study showed that the cost of goods and services had risen 36 per cent for the over-65s since 1998, while retail price inflation only rose 32 per cent.

Clerical Medical chief economist Martin Ellis said: "The cost of living for pensioners has increased by more than that for all households during the period, particularly in the last five years. The average cost of living facing pensioners has risen by more than one third over the past decade."

Mr Ellis added that the greatest reason for the sharp increase was the soaring cost of housing, council tax and property maintenance, although big increases in the price of tobacco and alcohol had an effect.

He said that the only items which were cheaper than in 1998 were clothing and footwear.


The Government has insisted that it is doing what it can to help pensioners afford their bills and avoid accumulating debts.

"That's why we're spending £575m increasing winter fuel payments this winter, working with energy companies to lower pensioners' fuel bills, and making it simpler for pensioners to claim all the help they're entitled to,“ said a spokesman from the Department for Work and Pensions.

"Average net incomes for pensioners, after they've paid housing costs, have increased by 43 per cent since 1997. Most pensioners own their own home and don't have mortgage costs."

The spokesman insisted that pension credit meant that no pensioner needed to live on less than £124 per week, because the benefit increases in line with average earnings.

However, the Joseph Rowntree Foundation charity has estimated that a pensioner couple needs £201 per week to live on.

Debt Management News posted on 01 August 2008

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