Pensions calculator is being negatively affected by inflation, claims Saga

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Pensions calculator is being negatively affected by inflation, claims Saga

Fri 10th Dec 2010

A senior Saga representative has highlighted the way inflation is cutting down the retirement savings of many retirees.

Dr Ros Altmann, director general of the over-50s financial services provider, claimed that pensioner inflation currently stands at over five per cent, compared to RPI and CPI at over four and three per cent respectively.

She explained that the effect this is having on older people who have bought level annuities is that their financial situation is deteriorating.

Dr Altmann said: "Inflation is having a dreadful effect on pensioners. Their savings are being eroded in real terms by ultra low interest rates, which are lower than inflation."

Her comments were made after Aviva released its quarterly Retirement Report, which indicated that the rising cost of living is the biggest fear for 74 per cent of people over 55 years old.

This is likely to come as no surprise to Dr Altmann, who pointed out that the official pensioner inflation index has risen by about one-third since 2003.

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