Inflation drop not benefiting pensioners
Inflation in April fell to a record low, but many pensioners are still seeing prices rise.
The retail prices index - which includes housing costs - was down to 1.2 per cent, but consumer prices index was still over the Bank of England's target at 2.3 per cent.
The difference between the two figures suggests some are feeling the benefit of falling prices, but many are not.
"For those who have not benefited from the reduced costs of borrowing, inflation still feels comparatively high," said Vince Cable, Liberal Democrat Treasury spokesman.
"Pensioners are continuing to be badly hit as they suffer the effects of inflation and watch their savings take a massive blow from interest rate cuts."
Data from Alliance Trust - tracking the cost of goods most often bought by pensioners as opposed to the general public - show for the over 75s the inflation was 3.9 per cent in April.
Although the rate is falling - as energy, fuel and food costs reduce - the over-75s face inflation 77 per cent higher than the under 30s.
Shona Dobbie, head of the Alliance Trust Research Centre, said, "Although it is good to see the inflationary pressures facing the elderly begin to recede, the actual rate of inflation facing this age group remains uncomfortably high.
"The benefits of falling prices are coming through more slowly for the elderly. This is a particular problem at the moment as it is older people, who frequently rely on income from savings, who are also suffering the negative impact of very low interest rates."
Mr Cable warned while inflation is dropping now, there remain concerns it will swing back - as the Bank of England's attempts to revive the economy could also bring back rising prices.
"Although many are currently experiencing deflation in the short term, the longer term concern must still be a return to inflation," he said.
"If inflation strikes back with a vengeance, the Bank of England will have to increase interest rates rapidly, badly hurting any economic recovery."
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