Pensions - Articles - Cost of living crisis deepens as inflation hits 9 percent

 Steven Cameron, Pensions Director at Aegon comments: “The cost-of-living crisis has just stepped up another gear with inflation now sitting at 9%. After the energy price cap jumped in early April, take-home pay is being hit by a triple whammy of soaring inflation, increased national insurance rates and a freeze in income tax thresholds, dragging ever more people into paying higher rate tax. Aegon’s latest research** shows nine in ten (90%) of adults are concerned about the impact of the cost-of-living crisis on wider society, with over half of these very concerned. This compares with 71% who are concerned about their own personal position.

 “One particularly vulnerable group is pensioners who’ve seen their state pension increase by just 3.1% in April, representing a 5.9% loss in their purchasing power with inflation currently at 9%. Those hoping to supplement retirement incomes from interest on cash savings face even greater challenges. A savings account paying at the base rate level of 1% is losing 8% in real terms with inflation at 9%%.

 “The Bank of England expect inflation to reach double digits at its peak in Q4 later this year. This could grant state pensioners a bumper increase under the triple lock next April, but only after what will be a very difficult year and a long, cold winter for many. It is still unclear whether the Chancellor will provide temporary or targeted support for those in greatest need, but in the meantime many individuals will be looking to cut back on ‘discretionary’ purchases where they can.”