Industry concerns over the impact of rising inflation on savers have persisted, despite the latest Consumer Prices Index (CPI) revealing that the growth of inflation has continued to slow in January 2023.

According to the update from the Office for National Statistics, CPI rose by 10.1 per cent in the 12 months to January 2023, down from 10.5 per cent in December 2022.

XPS Pensions Group pointed out that longer term expectations of inflation, which defined benefit (DB) schemes are particularly interested in, have also fallen 0.4 per cent over the past year.

However, the group clarified that although this long-term slowdown reduced liabilities by £80bn in isolation, record inflation levels over the past year have likely more than offset this reduction, with the realised impact of inflation over 2022 adding an expected £100bn to scheme liabilities.

XPS Pensions Group senior consultant, Charlotte Jones, commented: “The slowdown in inflationary growth is good news for pension schemes and should provide them with more stability in the longer term.

"However, the impact of unprecedented inflation levels over the past year is still being felt by some DB pension schemes that are continuing to review early retirement factors and pension increases in response.”

Industry experts have also raised concerns over the continued impact on savers, as Canada Life technical director, Andrew Tully, warned that today's numbers will offer "little consolation for people on fixed incomes".

“Despite rising interest rates, inflation remains stubbornly close to the 40-year high, largely driven by energy costs and food prices," he continued. "Households across the country will continue to feel the financial pain as incomes lag behind."

Tully also clarified that while a double-digit rise in state pension from April will offer some light at the end of the winter months for those past state pension age, April is also likely to see a further rise in average energy bills.

Adding to this, Abrdn strategic director, Jonny Black, commented: “The rate of inflation has now dipped for a third month in a row, which indicates the pressure experienced by households and businesses should continue to ease this year.

“However, while the rate of inflation is falling, this still merely shows that prices are rising more slowly than they were before."

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