Andrew Tully, technical director, Canada Life commented: “The squeeze on living standards is now a crisis, but we’ve got to ride out the storm as we’ve yet to feel the full force of even higher costs. From, energy to food and fuel, we are all seeing and feeling the effect in our weekly household budgets.
“If we want to maintain our current standard of living, households will need to spend an extra £30 a week on average.
“However, averages don’t reflect that many people rely on fixed incomes including retirees who typically live off pension income and can be disproportionately affected. Building some form of protection against the ravages of inflation can help people maintain living standards by combining drawdown and annuities as part of a retirement plan.
“A professional financial adviser can help you decide the best course of action for your personal circumstances, ensuring you stay on track to enjoy the retirement you have worked hard for.”
Sarah Pennells, Consumer Finance Specialist at Royal London says: “The first inflation figures of 2022 show why this is going to be the year of the squeeze. Price rises are already starting to bite, and these inflation figures don’t include the sharp rise in the energy price cap, taking effect from April. As inflation rises, the cost of living continues to increase, with many households feeling an even tighter squeeze on their budgets.
“We know that an increasing number of people are worried about being able to afford their household bills and food costs and, sadly, today’s figures will do nothing to reassure them.
“For those on state benefits, the gap between inflation and September’s rate of 3.1%, used for uprating benefits in April is growing ever wider.
“Interest rates are now at 0.5%, and while interest rates on best buy easy access accounts have started to creep up, they’re nowhere near inflation rates. So, savers, especially those who rely on savings for their income, will see the value of their money eaten away by rises in the cost of living. Even those who lock their money away in five-year bonds will only earn a little over 2% if they’re with a best-buy provider.”
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