Pensions chaos as inflation could dent your pot by £7,000: cost of living bites | Personal Finance | Finance

Final salary retirees have often been seen to have one of the best deals when it comes to retirement. However, these people could now be facing the barrel of a damaged retirement in the current climate.

The Telegraph reports that retirees will lose an average of £400 this year alone due to inflation.

Over his lifetime this will cost Britons £7,000, which many cannot afford to lose.

It could mean a reevaluation of retirement and pension decisions to reflect a new reality of rising prices.

Inflation has already shot up to seven percent this year and shows no signs of slowing down.

Some economists have warned that the price increase will reach 10 percent, a level not seen in many years.

These plans typically continue to pay a pension to spouses, domestic partners, or dependents when the plan owner dies.

Tom Selby, head of retirement policy at AJ Bell, recently warned that retirees are going to feel the inflation.

He said: “Runting inflation is a real and present danger to UK pensioners.

“Those downsizing can invest their cash to hopefully at least hedge against long-term inflation.

“However, they may also need to withdraw more income from their fund to maintain their lifestyle.

“Therefore, it will be crucial for retirement investors to regularly review their retirement strategy in the coming years, ideally with a regulated adviser, to ensure it remains sustainable.”

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