Andrew Tully, technical director at Canada Life responds to the OBR’s estimates that we will see the biggest fall in disposable income since records began:
“The OBR has forecast average inflation to hit 7.4% this year, implying that things are certainly set to get worse before they get better. We can’t say exactly where inflation will ultimately peak, possibly as high as 9%, but the OBR has already forecast that this will lead to the greatest drop in household living standards in any single financial year since ONS records began.
“Inflation is already at a record 30-year high and the longer it continues to remain above the Bank of England’s 2% target will determine our real living standards for years to come. Especially for pensioners whose personal rate of inflation may be well above the headline rate.
“While the government has restated their commitment to the state pension triple lock, any rise reflecting the current high inflation will only take effect from April 2023, which offers little in the way of comfort for those pensioners struggling to make ends meet today.”