Older people hit harder by inflation: it will get worse

It will come as no surprise at all to older people, struggling to make ends meet on a paltry pension, that they are hit far worse by inflation than any other age group. The inflation rate for older people is running at around 4.5% - 0.1% higher than the rate for the rest of the country.

And the bad news is that things are going to get even worse.

Pensioners lose out
A study by the Institute for Fiscal Studies looked at inflation over the last three years and said pensioners were losing out. The problem is that such a large chunk of their income goes on essential bills such as gas and electricity. These have doubled in a decade, to an average of around £1,162, which is a nightmare for those on a low, fixed income. Many have been forced to stop heating their homes effectively in order to try to save money, many others are forced to cut back on essentials like groceries in order to maintain standards.

Meanwhile, while other groups benefit from falling mortgage costs in a low interest rate environment, pensioners don't feel the benefit at all, because most of them have already paid off their mortgage.

Dr Ros Altmann, Director General of Saga, told the Daily Mail that the current plight of older people was an outrage, but warned that this is just the start. She predicts that inflation for pensioners will rise to 6% within months, especially now the energy companies have embarked on another round of price rises.

So what can you do about it?
There are a few things you can do to get on top of your bills. The first is to look at a fixed tariff. This will initially be even more expensive than the small fortune you are already paying. However, as prices rise again in the next few months you will have the certainty of a fixed rate, and may soon be paying less than those on variable rates.

Alternatively, you can look at energy efficiency measures that don't involve turning the heating off. Most of us are sick of hearing about energy efficiency, and many have already taken a number of steps. However, if you haven't tried to cut back on energy this way you could save 10% off your heating bill without sacrificing warmth.

Finally, you can check to see what arrangements your energy company has for people experiencing real hardship in paying their bills. All electricity companies and some gas companies have a programme, which can be used to write off a portion of bills, pay for central heating to be installed, or for energy efficiency measures. Each is run by a trust, which has its own rules, so if you think you may be eligible it's well worth approaching your energy company and asking about it.

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