The Consumer Price Index (CPI) has remained at 2.8 per cent in March according to latest figures from the Office for National Statistics (ONS), therefore resulting in pensioners’ budgets remaining “incredibly strained”.

The figure is the same as was recorded in February and the largest downward contributions came from furniture and furnishings, motor fuel and meat with upward contributions coming from the recreation and culture sector. The Bank of England (BoE) expects the rate of inflation to exceed three per cent this year.

Prudential retirement expert Vince Smith-Hughes stated: “With inflation staying high, pensioners’ budgets remain incredibly strained. Retirement incomes in 2013 have hit a six year low, with those retiring this year expecting an annual income of £15,300 – 18 per cent down on 2008.

“It is important that those retiring take the impact of inflation into account when planning their future income. Contacting a financial adviser or retirement specialist is essential when choosing an annuity as the inflation risk can erode the spending power of retirement income. By getting good quality financial advice, retirees can ensure they are well positioned for retirement.”

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