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Gordon Lishman‚ Age Concern's Director General‚ said:

“Although high‚ the official inflation rate simply does not reflect the reality facing millions of pensioners. Soaring energy and food prices mean the average pensioner is now experiencing an inflation rate of 7.4% – leaving many struggling to afford the basics‚ let alone anything else.

“With the cost of living sky-rocketing‚ the Government should be taking the real rate of inflation for pensioners into account when uprating next year’s Basic State Pension and Pension Credit. In the meantime‚ the Government must respond to these exceptional times by introducing an emergency package of measures to help the most vulnerable pensioners through this winter.”

- ENDS -

Notes to editors

• IFS research‚ funded by Age Concern‚ found that in August 2008‚ average pensioner inflation reached 7.4%‚ significantly higher than the 5.4% rate for non-pensioners and the highest rate for pensioners since 1991. In the same month‚ the youngest‚ richest pensioners had an average inflation rate of 6.1% compared to 9% for the oldest‚ poorest pensioners. For further information about the research please refer to our media section and the Institute for Fiscal Studies press release.
• The Basic State Pension (BSP) is currently uprated each April in line with the previous September’s inflation rate or by 2.5%‚ whichever is greater. In April 2008‚ the Basic State Pension increased by 3.9%. The RPI figure of 5% published today is likely to determine next year’s Basic State Pension increase – if it does‚ the new rates will be: Single pensioner - £95.25 (up from £90.70) and a Pensioner couple - £152.30 (up from £145.05)
• Pension Credit is uprated each April in line with average earnings‚ calculated on a three-month average taken from May – July the previous year. In April 2008‚ Pension Credit increased by 4.2% (honouring the commitment made at Budget 2007 to uprate in line with earnings growth as forecast at that time). It is expected that Pension Credit in April 2009 will rise by 3.5%.

Age Concern’s recommendations to the Government

• Increases to the Basic State Pension and Pension Credit should never fall below the real pensioner inflation rate. Next year (April 2009)‚ the Basic State Pension should be increased in line with pensioner inflation instead of the ONS inflation rate‚ and Pension Credit should be increased in line with low-income pensioner inflation or average earnings‚ whichever is higher. 
• Given low benefit take-up rates and exceptional increases in pensioner inflation rates‚ the Government should mount a high-profile campaign to improve take-up of benefits this winter and make an emergency payment of at least £100 to all pensioners entitled to benefits.
• Automatic payment of benefits such as Pension Credit should be introduced as quickly as possible.
• A clear government strategy is urgently needed to ensure that all pensioners are receiving the advice and claiming the money benefits they are entitled to.

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