Standard Life Warns Public To Inflation Proof Retirement Incomes
Released on: June 17, 2011, 2:07 am
Standard Life is warning anyone thinking about retirement to
consider the effects of inflation eroding their income. New data
released today by the savings and investments specialist shows that
many people could see their retirement income swallowed up by the basic
costs of living within seven years, as the effect of inflation impacts
their spending power.
Using Office for National Statistics data and official Government inflation figures,
Standard Life has calculated that someone with a personal pension pot of £80,000,
buying a level annuity, will spend their entire monthly income (from private and
state pensions) on basic living costs like food and fuel within just 7 years of
John Lawson, Head of Pensions Policy at Standard Life said: “The cost of living is
rising fast for most people in the UK, but this can be particularly acute for
pensioners. Their spending habits are driven by commodities such as food and fuel
bills and these inflation rates are much higher than the overall UK inflation
"People need to consider how to protect their buying power in retirement from the
ravages of inflation over a long period of time, which could be 30 years or more.
If pensioner inflation remains at around 6% a year, people with a fixed income could
lose almost half of their spending power within a ten year period.
"There are many options to consider at retirement which could minimise the impact
of inflation on your income, so seeking professional financial advice is vital."
For further information on inflation proofing retirement income, and the choices
available, interested parties can visit www.standardlife.co.uk/retirement_solutions/search.html.
Notes to Editors:
*Couple, male aged 65 and female aged 62, with a £80,000 pension fund who have
purchased an annuity
** For example, see Age UK, 'silver RPI', www.ageuk.org.uk/latest-press/archive/silver-rpi-impact-of-inflation-for-those-in-later-life/.
About Standard Life:
Standard Life is a leading long term savings and investments company headquartered
in Edinburgh and operating internationally. Established in 1825, Standard Life
provides ISAs, life assurance, annuities, mutual funds,
investment bonds, tax efficiencies, pension planning advice, and investment management to over 6.5 million customers worldwide.
Senior Media Affairs Manager
Standard Life plc
30 St Mary Axe
44 (0)20 7872 4481
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