Commenting on today's Bank of England's announcement that it will keep interest rates low for the next two years, Dr Ros Altmann, Director-General, Saga said:
"The Bank of England has committed to keep interest rates near zero, despite inflation repeatedly overshooting its targets in the past two years, and continued expectations of further inflation increases still to come.
"The Bank argues that keeping rates low can be justified by its forecast that inflation will be below the 2% cpi target in two years' time. That is scant comfort for pensioners or savers who are witnessing their savings erode at an alarming rate. Every month of high inflation sees purchasing power permanently taken away from pensioners living on fixed annuities. Even the state pension has fallen well behind pensioner inflation. For example, latest figures from the Office for National Statistics report pensioner inflation is running at 6.2%, far higher than the uprating of state pension.
"Saga's recent poll of over 11,000 older people revealed that over 60% of the over 65s would like to see a rise in interest rates in the next few months.
The livelihoods of the UK's 12million pensioners are being ignored. They have been told for the past two years that inflation was only a 'temporary' problem, but that has turned out not to be true, which has resulted in many of them struggling to survive."
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