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Osbornes Impact on Changes to Cost of Living Calculations
08/04/2011
It was recently reported in the National Press that the way the cost of living is calculated will be changed by George Osbourne. Any increases to benefits and pensions will be brought in line with the Consumer Price Index (CPI), as opposed to the Retail Price Index (RPI).
The CPI does not include housing costs, which means that it raises at a slower rate to the RPI. These are expected to fall to 2.5% and 3.6% respectively next year (currently at 4.4% and 5.5%).
The move to CPI could also hit pensioners next year. The state pension will rise by the higher of wages, CPI or 2.5%. But RPI is predicted to be 3.6% which is higher than all three.
By April 2016, pensioners could miss out on almost £700 of income as the basic state pension is raised more slowly.
Homeowners aged over 55 years who are concerned about the cost of living and would like to know how much money the value of their property could release to help increase their income, can find out by contacting therightequityrelease.co.uk for equity release advice.
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