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Newsletter

Pensioners 'suffer more from inflation'

By Tom Farley, Thu 18 Feb 2010 - Published in Pensions

Older people are likely to suffer if inflation continues to rise in the UK, it has been suggested.

Recent research from the Alliance Trust claimed that 65 to 74-year-olds saw their inflation rate increase from 3.8 per cent to 4.6 per cent during January.

Tom McPhail, head of pensions research for investment management firm Hargreaves Lansdown, said that inflation affects pensioners more than other groups and pointed out that this will negatively impact on their spending power.

"Occupational pension schemes and annuity payments all have their own individual measures of inflation which may or may not mean they are currently keeping pace with headline rates of inflation," he explained.

In addition, Mr McPhail noted that pensioners have to allocate more to healthcare spending and provision than other age groups, which adds to their financial problems.

Recently, Robin Ellison, head of strategic development of pensions at international law firm Pinsent Mason, claimed that taking out a workplace pension is always a good idea.