Pensions - Articles - LV= on the latest inflation announcement

 “The announcement that we remain in a low inflation environment is a mixed bag for those concerned about the cost of living, such as retirees who are often hit hardest by rising inflation. This section of society often spends a significantly higher percentage of their disposable income on bills, such as electricity so the continued fall in the price of utilities will be welcomed. However, many retirees rely on the interest paid on their savings to boost their retirement savings and the amount of interest they are receiving is likely to be considerably low. Although inflation is low at the moment it is expected to return to target in the next few years, so it is important that it is taken into consideration when purchasing a retirement income solution.

 “The pension freedoms that came into force in April gave retirees greater freedom as to how they take an income from their fund and some have taken their fund as a lump sum and have moved it to a cash account. Given we are still in a low interest rate environment, this may not allow retirees to make the most of their pension savings as growth will be negligible. For those approaching retirement, we would encourage them to seek financial advice to understand how best to achieve the level of retirement income and flexibility they require.”