General Insurance Article - Inflation figures mean household budgets have to increase

 Each household will typically need to spend an extra £632.32 a year to maintain their standard of living compared to a year ago.

 Andrew Tully, pensions technical director, Retirement Advantage commented: ‘Households across the country will feel the inflation squeeze as bills rise for everything from council tax, food and clothing, to water and other utilities.

 ‘Although we will all feel the pinch, rising bills can have a devastating impact on people with fixed incomes, typically those in retirement. People will find their private pensions and savings will simply not go as far as they once did.

 ‘Our research shows people are worried about paying the bills and the rising cost of living, but how do you balance the need to live and also ensure your savings last the duration of your retirement? If you blend annuity and drawdown you can have the best of both worlds, with guaranteed income to pay the bills while funds invested can be seen as a natural hedge against inflation.

 ‘Seeking professional financial advice can help you decide the best course of action for your personal circumstances and ensure you enjoy the retirement you have worked hard for.’

 Retirement Advantage research3 shows 72% of people think paying the bills is a priority in retirement while 30% are worried about the cost of living.