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Pensioners hit by 36 per cent inflation in past decade

Pensioners have seen inflation of 36 per cent over the past ten years which is faster thatn the increase in retail price inflation.

According to a report by Clerical Medical, the general price level of goods and services that pensioners purchase rose by 20 over the past five years compared to 18 per cent in the RPI.

Rising housing costs have been a key driver behind pensioner inflation in the past decade with a 69 per cent increase.

Council tax rose by 89 per cent and repairs and maintenance rose by 84 per cent and were the key factors behind the rise in housing costs.

Pensioner inflation was above retail price inflation throughout the period between 2003 Q1 and 2007 Q1 before coming into line, at 4 per cent, in 2008 Q1.

Over the past five years, pensioner inflation has averaged 0.5 percentage points above retail price inflation (20.3 per cent against 17.8 per cent).

Alcoholic drinks & tobacco saw the largest increase in inflation at 45 per cent among non-housing items over the last ten years.

Transport and food and non-alcoholic drinks recorded the second and third highest inflation rates respectively.

Clothing and footwear was the only main category of expenditure where prices have fallen in the last ten years.

Clerical Medical chief economist Martin Ellis says: “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.”

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