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Over-55s living costs rise steeply

12 August 2011

Latest Silver RPI[1] findings show that since 2008 the extra increase in prices in relation to the Headline RPI is now costing the average over-55-year-old an additional £984.281 per year, in relation to the population as a whole.

The gap since 2008 between inflation experienced by the general population and those in later life is in part the result of the current low interest rate environment, which has reduced mortgage payments for the majority of homeowners but benefited those in later life less, because they are less likely to carry mortgage debt.

Commenting on the findings, Logan Steele, General Manager of Age Scotland Enterprises said: "The fact remains that since 2008, people in later life have consistently experienced price rises at a far higher rate than Headline RPI.

"At an age when significant long-term financial decisions are being made, the Silver RPI is crucial to helping people better plan for their future costs."

While three year trends demonstrate how cost rises adversely affect those in later life, there has been a slowing of inflation for over- 55s in the last three months, suggesting that older people are perhaps not as financially insecure as first thought.

Over-55s have experienced inflation at 0.27 percent below Headline RPI since March this year, which in monetary terms suggests this age group is £53.222 a year better off for this period. This improvement however does little to change the three year trend, which shows that cost rises have negatively affected those in later life by £984.28 more than the population as a whole since January 2008.

Logan Steele continued: "It is of course welcome news that the Silver RPI for March to June 2011 shows a decrease in the gap between Headline RPI and cost rises experienced by those over-55. But it is still important to help those in later become "smarter" consumers, particularly when it comes to financial products and services.

"That is why Age Scotland Enterprises is committed to supporting consumers to shop around so they buy the best value deals and the most appropriate products for their needs."