Despite the fall in CPI inflation announced last week, UK households need to find an extra £27bn this year in order to keep pace with rising prices.
The research from MGM Advantage found that the average household will spend an extra £1,035 a year in order to maintain living standards.
This means that each person in the UK will need to spend £436 more in 2012 to enjoy the same quality of life as they did in 2011.
Current inflation levels mean that the goods and services we buy are becoming more expensive. In many cases, our wages are failing to keep pace with rising prices, as pay rises are typically less than inflation and in many cases pay is frozen.
This is a particularly important consideration for those in retirement.
The goods and services we typically consume in later life tend to rise in price faster than those consumed by people still in work. Spending on health care and leisure activities tends to rise in price faster than other forms of spending.
Understanding the impact of price inflation in retirement is a must when considering retirement income options.
Photo credit: Flickr/dodgyhoodoo
