Inflation is putting pensioners under increasing financial strain, it has been revealed, leaving many struggling to avoid bankruptcy.
According to the Newcastle Building Society equity release service, real inflation for pensioners will be as high as seven per cent in 2008 – double the national inflation rate.
The main factors behind this hike are food and fuel, while council tax is also proving a burden.
“These findings paint a bleak picture for pensioners in 2008,” commented Bob Mottershead, retail sales executive at Newcastle Building Society.
“The rising cost of living is undoubtedly a concern for us all, however, commonly it is those in later years who suffer the most. For the many relying on the basic state pension of just £87.30 per week, these increases could negatively impact everyday quality of life.”
In order to reduce the financial strain they are under, many pensioners are turning to equity release as a solution, Mr Mottershead said.
He suggested that equity release was especially popular among asset-rich, cash-poor retirees as they struggle to make ends meet.
According to the Department of Work and Pensions, there are currently 1.1 million pensioners living in poverty.