Pensioners Smaller Disposable Income due to Rising Bills
The most recent Norwich Union Retirement Index has revealed that household bills are rising faster than pensions, reducing pensioner’s disposable income.
In the most recent quarterly data, it was shown that between the first and second quarters of 2006 average pensioner household income increased 0.6% while essential expenditure rose by 3.8%.
The index tracks changes retirement comforts over time and is compiled by the centre for economics and business research (cebr).
Whilst the average income of a pensioner household has risen by 31% 1995, household bills have increased 58%, severely hurting disposable income for pensioners.
In the report it was revealed that between August 2005 and August 2006 costs of fuel, gas and electricity increased by 9%, 39% and 27% respectively. This cost pensioners an extra £14 a month. In this period pensioner household bills have increased 8.6% overall, at over three times the rate of inflation as measured by the government’s consumer price index.
Dominic Walley, managing economist of cebr, said in a statement: “Norwich Union commissioned this index to look at the challenges faced by retired people, and to see how pensioners’ disposable income is changing. Retirement is often regarded as a time when pensioners should be enjoying their life but rising household bills mean that many on fixed incomes are struggling.”
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