Inflation ‘impacting household living standards’

Ongoing inflation in the UK is placing increasing pressure on the finances of households up and down the country, with Britons now needing to find an additional £10.7 billion a year to maintain their standard of living.

The latest consumer price inflation figures from the Office for National Statistics show inflation stood at 1.6 per cent in July.

As a result, retirement income specialist MGM Advantage has extrapolated that each household now needs to find an additional £406 to maintain their standard of living in comparison to the same time last year and this is placing increasing pressure on people's ability to pay for essential living costs.

Aston Goodey of MGM Advantage said: "The inflation yo-yo continues to play havoc with peoples' finances at a time when many have already made cutbacks to makes ends meet. We will continue to see a fall in living standards until pay rises match inflation."

He added that with older generations now living longer, many people now face the unenviable situation whereby inflation could be eroding their savings during their retirement.

Indeed, Mr Goodey noted that over a 25-year period – the typical amount of time over which retirees will draw on their savings – current levels of inflation could cut the value of their savings and pension pots by as much as half.

This is therefore an extremely important issue that individuals now need to be aware of, as proper planning for retirement holds the key to maintaining the best quality of life – something that may become increasingly difficult should levels of inflation continue to outstrip wage growth.

Individuals wishing to maintain their standard of living both at present and in the future could benefit from seeking the services of a professional financial adviser, who may be able to highlight areas of their present outgoings that could be reduced.

Posted by Joe White