The Consumer Price Inflation (CPI) measure for inflation fell to 1.9% in the year to January 2014, down from 2.0% in December 2013.

The Office for National Statistics (ONS) said the fall in the rate resulted from price movements for recreational goods & services, furniture & household goods and alcoholic beverages & tobacco. These were partially offset by price movements for miscellaneous goods & services.

However, the Retail Price Inflation (RPI) measure RPIJ grew by 2.1%, up from 2.0% in December 2013.

Vanessa Owen, head of annuities and equity release at LV=, said: “The fall in the rate of inflation is great news for those worried about the rising cost of living. This is especially good news for those in retirement who are often hit hardest by rising inflation. This section of society spend a significantly higher proportion of their disposable income on bills, such as heating, and less on luxury items, the ‘Silver Inflation’ rate is typically higher than the headline inflation figure.

“Our research found that almost half of over 65’s are concerned about the impact inflation will have on their retirement income. However, with people spending longer in retirement, the risk of inflation eroding someone’s purchasing power is an issue that must be considered when deciding how to structure their income.”