Inflation ‘could be pushing the over-55s towards debt’

Inflation could be pushing those over the age of 55 in Britain towards debt, new figures have suggested.

The Silver Retail Price Index (RPI) – launched today by Ague UK Enterprises, which is the commercial services arm of the charity Age UK, to coincide with the Bank of England Quarterly Inflation Report – has found the burden of inflation on older people has been far greater than estimated.

It revealed people in this age bracket have experienced price rises at almost two per cent above that indicated by headline RPI figures since the beginning of 2008.

Moreover, for those over 75, this figure escalates to four per cent.

It means the gap between actual and headline inflation in this time has cost the average 60-year-old an additional £620 every 12 months, while for individuals between the age of 65 and 69, this leaps to £700 a year.

The study claimed the gap between inflation costs for those in later life and the general population has significantly widened in the last 24 months.

It noted the main reason for this disparity is the drop in mortgage interest rates.

Gordon Morris, managing director at Age UK Enterprises, said: “In the aftermath of a global recession many households are struggling with their finances but, as revealed by the Silver RPI, those in later life are disproportionately affected, particularly in recent times.”

The findings follow research conducted by Bright Grey that showed almost seven million people in Britain are spending more cash than they earn in an effort to fund their modern lifestyles.

By Joe White