Alliance Trust says pensions must rise to meet elderly inflation rate

14 February 2007
Britain's over-75 population continue to be worse hit by inflation than any other social group, research from the Alliance Trust has shown, leading to calls for improved pensions provision.

Over-75s' inflation rate, calculated by factoring in the disproportionate segment of older people's income which goes on fuel and utilities, was at 4.2 per cent for January, the study found.

The oldest generation thus suffer under inflation rates more than twice the government's target figure of two per cent.

Although inflation rates across the UK have dipped to 2.7 per cent, older people are experiencing inflation 56 per cent higher than the average, the Trust warned, thanks to gas price inflation of 39 per cent and electricity price inflation of 27 per cent.

The Trust is calling for pensions to be linked to the rise in the cost of living for retired people and raised accordingly.

Nevertheless, the beginning of what commentators are calling a new price war between gas providers suggests that consumers may at last become the beneficiaries of the drop in wholesale gas prices.

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