Retired see cost of living rise faster than national average

MGM Advantage, the retirement income specialist, warns that retired people are seeing their cost of living rising at a much higher rate than the national average.

Its analysis of industry data reveals that between 2002/03 and 2007, the average annual expenditure in households where the main occupant is aged 65-74 increased by 22.49%, compared to a national average of 15.91%. The corresponding figure for households where the main occupant is 75 and over is 25.18%.

Based on the average annual percentage increases in household expenditure between 2002/3 and 2007, MGM Advantage estimates that the annual household expenditure today where the main occupant is aged 65 - 74 would be around £22,677.96, compared to £14,700.15 where the main occupant is aged 75 and over.

Aston Goodey, Sales and Marketing Director, MGM Advantage comments, "The cost of living is rising and unfortunately retired households are having to face up to higher than average increases. This is because older households spend a greater percentage of their expenditure on housing costs, fuel and goods and services that in recent years have seen some of the highest increases in costs.

"This, in addition to the fact that life expectancy has increased, means more pressure is being placed on retirement income. This makes it all the more important to shop around for the best annuity, and seek financial advice to ensure you achieve the best possible income in retirement.

"As an example, many people don't realise they could get a higher income if they suffer from certain medical conditions. And these don't have to be serious conditions - diabetes, high blood pressure or raised cholesterol levels could qualify you for an enhanced annuity rate. Our research3 shows that, depending on your medical condition, you could achieve up to 20% more income."