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'Pensions stretched by record inflation'

Retired people could find their pensions being stretched further with the news that over-75s are facing a record level of inflation.

The Office for National Statistics yesterday revealed that headline inflation had moved outside the chancellor's upper boundary in March, to a level of 3.1 per cent, far above the two per cent target level.

However, households aged over-75 saw their rate of inflation grow from 4.5 per cent to 4.7 per cent during the same period, according to the Alliance Trust Research Centre.

Shona Dobbie, head of the organisation, explained that any household that spent a high proportion of its budget on basic goods and services was facing a higher rate of inflation.

She commented: "The impact of higher prices for basic goods and services, such as heating and food, always falls most heavily on the elderly, who spend a larger proportion of their budgets on these necessities."

Spokesperson for the Association of British Insurers Jonathan French recently commented that many people would consider a state pension alone inadequate to meet all of one's financial needs in retirement.


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