The UK’s CPI inflation rate fell to 2.1% in November from 2.2% in October, the Office for National Statistics (ONS) has reported.
The largest contributions to the fall in the rate came from food and the utilities (gas and electricity). These were partially offset by upward contributions from the transport sector and from some aspects of recreation & culture.
CPIH grew by 1.9% in the year to November 2013, down from 2.0% in October. RPIJ grew by 2.0%, up from 1.9%.
Vanessa Owen, LV= head of annuities and equity release said: “With the rate of inflation approaching the Bank of England’s target of 2%, this is certainly positive news for those worried about the rising cost of living. However inflation remains a significant threat to a comfortable retirement and many still overlook the real impact. Even at 2.1% inflation, many pensioners will see their disposable income greatly reduced over the course of their retirement. Particularly as the ‘Silver Inflation’ rate (as inflation for the retired population is often labelled) is generally higher than overall CPI.
“Retirees today have far more choice about how to structure their income in retirement, and many of the options can provide an element of inflation-proofing, yet the majority of annuities sold today are still on a level basis.
“People looking forward to a long and happy retirement should look at alternative solutions such as investment linked annuities, fixed term annuities or drawdown. With people spending longer in retirement it is important that they purchase a product that ensures them the best possible income over the long term as the choices they make will impact them for years to come.”
