The general price level of goods and services purchased by pensioners has risen by 36 per cent in a decade, new research from Clerical Medical has revealed.
In the meantime, Retail Price Inflation (RPI) has risen by 32 per cent; this pattern is also reflected over the past five years where inflation for pensioners has risen by 20 per cent compared to RPI which has grown by 18 per cent.
Rising housing costs have made the largest dent in a pensioner's budget with an increase of 69 per cent over the past ten years. Council tax has risen by 89 per cent, while repairs and maintenance at a rate of 84 per cent. Consequently, housing now represents 25 per cent of all expenditure for pensioners.
However, according to the research, all households are seeing around 27 per cent of their overall expenditure go on housing costs each month. These statistics are unsurprising given the steady but steep incline in mortgage
rates and fees.
As the UK enters yet another phase of today's credit crisis, pensioner inflation has also picked up speed, the price of goods and services bought by the typical pensioner household increased by 8.8 per cent in the two years to 2008.
Transport accounts for the smallest proportion of a pensioner's household budget with just 11 per cent in comparison to other households who spend 14 per cent on travel costs.
Martin Ellis, chief economist at Clerical Medical, said: "The average cost of living facing pensioners has risen by more than one-third over the past decade. The cost of living for pensioners has increased by more than that for all households during the period, particularly in the last five years.
"Higher housing costs have been the key factor behind rising living expenses, accounting for a quarter of the total average weekly expenditure of a typical pensioner household."
The research was part of pension
specialist's, Clerical Medical's series of research pieces published by HBOS plc that highlight savings and wealth trends in the UK.
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