Over-65s 'see cost of living soar'
Updated on 25 July 2007
The cost of living for elderly people is rising at more than twice the rate of other households, research has showed.
People aged between 65 and 74 saw their annual expenditure increase by around 9% a year between 2002 and 2006, more than double the national average of 4%, according to insurer Prudential.
The situation is even worse for people over 75, who saw their cost of living soar by around 10% a year during the same period.
The group said the steeper increase in expenditure for older people was caused by the higher proportion of their income they spent on food and drink, the cost of which is rising at up to five times the rate of inflation.
It said the average household spent around 10% of its annual income on food and non-alcoholic drink, but this rose to 13% among people aged between 65 and 74, and was 15% for people over 75.
But it warned that the jumps in the cost of living being faced by pensioners were being made worse by the fact that the average pensioner income was increasing by just 3% a year.
Prudential claimed that if prices continued to increase at the same rate they have been, average annual expenditure for people aged between 65 and 74 would soar from around £21,611 in 2005/06 to £33,619 in 2011/12 - an increase of 55%.
For people over 75 the annual cost of living would increase by 62% to average £22,553, while average households would see a 24% increase to £41,386.
Gary Shaughnessy, managing director of Prudential retail, life and pensions, said: "When compared to the average home, older households see a greater share of their expenditure go on housing costs, fuel and household goods and services.
"In recent years these have seen some of the highest increases in costs, which helps explain why retired people are seeing a higher rate than the average in their annual expenditure This, coupled with the fact that life expectancy has increased, is putting much greater pressure on income in retirement."
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