Inflation falls to 1.6% in March

According to the ONS, the largest contribution to the fall in inflation for March was due to transport and motor fuels.

This downward effect was partially offset by upward contributions from restaurants, hotels and alcohol and tobacco.

John Perks, Managing Director, LV= Retirement Solutions said:

“The fall in inflation is good news for households concerned about the cost of living, especially those in retirement who are often hit hardest by rising inflation.  As this segment of society spends a considerably 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 65s are concerned about the impact inflation will have on their retirement income. With people spending longer in retirement, the risk of inflation eroding someone’s purchasing power is an issue that should be considered when deciding how to structure their income.

“Whilst there are retirement solutions available that provide an element of inflation-proofing, the majority of annuities sold are purchased on a level basis. Following the Chancellor’s latest budget announcement we expect this to change, as increasing numbers of retirees look to alternatives such as fixed term and investment linked annuities.

“The retirement products that best suit a retiree’s need will depend on their individual circumstances. We believe that it is essential that retirees seek independent advice to ensure that they make the most of their pension savings.”