UK households need to find £406 each to maintain standard of living

The latest data shows UK inflation (CPI) grew by 1.6% in July 2014, down from 1.9% in June. This change in inflation leaves UK households collectively needing to find an extra £10.7bn a year to maintain their standard of living compared to 12 months ago, according to MGM Advantage, the retirement income specialist.

Each household will typically need to spend an extra £406 a year to maintain their standard of living compared to a year ago.

Aston Goodey, MGM Advantage said: ‘The inflation yo-yo continues to play havoc with peoples finances at a time when many have already made cutbacks to makes ends meet. We will continue to see a fall in living standards until pay rises match inflation.

‘Older generations are living longer, and face the challenge of ensuring their savings last the distance while trying to maintain a standard of living. The corrosive effects of inflation could halve incomes over a 25-year retirement. This is why it is important you think about your income options to try and maintain your standard of living.

‘A professional financial adviser will be able to help you navigate the retirement income maze and decide what is best for your personal circumstances.’