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Bills soar for pensioners

PUBLISHED: 10:01 16 April 2008 | UPDATED: 20:08 05 July 2010

Thousands of pensioners living on less than £6,000-a-year will feel the full force of the credit crunch as food and utility bills soar, experts warned last night.

Thousands of pensioners living on less than £6,000-a-year will feel the full force of the credit crunch as food and utility bills soar, experts warned last night.

New government figures show that half of all single elderly people are relying solely on minimal state benefits, with the majority of private retirement funds doing little to provide additional income. The figures from the Office of National Statistics (ONS) show millions nationally living below the official poverty line.

Those most in need are likely to feel the pinch of the economic slowdown and charities warned many will have no choice but to make cutbacks. The cost of energy and heating oil are already at their highest point in recent years. Now food bills are rising faster than at any time since 1991 due to global food shortages.

Linda Gill, information and advice manager at Age Concern Norfolk, said that a large number of elderly people are not claiming their full benefit entitlement and could significantly boost their income.

“Those living off the lowest incomes struggle to maintain their way of life,” she said. “Many will turn down their heating or cutback on food and that can have more serious implications in terms of health.

“But the message to those people is: there's no need to suffer in silence. Help is at hand and they may well be entitled to more money than they realise.”

According to the ONS, although two-thirds of elderly people have some form of private pension, most provide less than £1,000 annually.

More than 60pc of married pensioners have a combined annual income of less than £10,000, a figure likely to get worse as investment in privation pension schemes decreases.

The majority of over-65s have their income topped up by state benefits, including pension credits, with couples getting an average of £7,296 and single men and women £5,259 and £5,496 respectively. Those on the lowest amount are entitled to pension credits which guarantees an income of £124-a-week compared to £69 in 1997.

Meanwhile the international cost of cereals is up by almost half in a year meaning British meat and dairy products have soared in price. The average shopping bill is expected to go up by £600-a-year. This adds to the impact of higher charges for mortgages, heat, light, water, petrol and council tax.

It also emerged yesterday that the number of retired people unlocking money from their homes fell during the first quarter of the year as problems in the wider economy hit their confidence.

The number of equity release plans taken out fell by 16.5pc compared with the first three months of 2007, with 6,009 of retired people unlocking money compared with 7,196 in 2007, according to advisers Key Retirement Solutions.

A separate survey, carried out by Saga Home Insurance, concluded that inadequate retirement incomes are forcing growing numbers of pensioners to move home in a bid to reduce their living costs.

It found that 31pc of retired people moved house at least once since they stopped working. This compared with just 8pc of people who had yet to retire who were planning a move.

Joe Harris, the general secretary of the National Pensioners Convention, said: “For years, successive governments told us it was ok to keep the state pension low because private company pension schemes would ensure that everyone had a comfortable income in retirement. But these figures prove that was a myth.”

Age Concern Norfolk this month launched its More Money In Your Pocket campaign to help pensioners claim as much as possible in benefits. In the last 12 months the charity has helped almost 1,000 older people claim extra money - amounting to a total of well over £1m.

For more information contact Age Concern on 01603 787111.

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