One in two people say they have cut back to makes ends meet

Just as inflation hits a 13-month low, MGM Advantage, the retirement income specialist, has published data which shows one in two people have cut back on spending over the past year to makes ends meet.

The latest data shows UK inflation (CPI) grew by 2.2% in October, down from 2.7% in September. This change in inflation leaves UK households collectively needing to find an extra £14.4bn a year to maintain their standard of living compared to 12 months ago.
 
Each household will typically need to spend an extra £553 a year to maintain their standard of living compared to a year ago.
 
Aston Goodey, MGM Advantage said: “This may offer welcome temporary relief for people but inflation has hit households hard over the last year. Although petrol and diesel prices have driven down inflation, there is a fear the recent energy price hikes will fuel further inflation

“Many people are struggling to makes ends meet, with one in two cutting back on spending in any way they can over the last year to cover the cost of day-to-day living. This clearly shows we are in the middle of a cost of living crisis.
 
“Inflation has a disproportionate effect on retirees, who spend a larger percentage of their income on household bills. 42% of the over 65s have cut back on spending over the past year on things like energy, food and going out to try and stretch the monthly budget. This issue highlights the importance of ensuring any pension income considers inflation during retirement.”
 
MGM Advantage has published a guide to the effects of inflation in retirement in association with Jupiter which can be downloaded at:
 
mgmadviser.com/products/flexible-income-annuity/growth-performance