'The older you get, the worse off you are'

The cost of goods as measured by the Retail Price Index rose by 7.4 per cent between January 2008 and September this year, but older people have faced a far steeper rate of inflation because of the higher proportion of their income they spend on food and utility bills.

As a result, while the typical household has faced price rises of 7.4 per cent during the period, those aged over 75 have seen their cost of living soar by 11.5 per cent, according to Age Concern Enterprises, the commercial arm of the charity Age UK.

People aged between 70 and 74 have seen the next steepest increase at 11.2 per cent, while those aged between 65 and 69 have faced a 10.7 per cent hike in the cost of living.

The 65 to 69 age group has seen the biggest increase in monetary terms, due in part to their higher spending levels compared with older age groups, with these pensioners an average of 710 a year worse off than the typical household, as a result of the higher rate of inflation they face.

Overall, this age group would need to spend an additional 2,300 a year, just to maintain their lifestyle at the level it was at in January 2008, according to the research which was carried out by Fathom Consulting for Age Concern Enterprises.

The group, which re-weighted the 78 items that make up the official RPI to better reflect the expenditure patterns of the over-55s, found that people aged between 70 and 74 would be 690 worse off a year than the typical household as a result of inflation, while those aged between 60 and 64 would be 640 worse off.

It said one reason why the over 55s had been hit so hard by increases in inflation was because they were less likely to have a mortgage, meaning they have not benefited from record low interest rates. Some of the steepest price rises have also been seen in areas where older people spend proportionately more of their income, such as utility bills.

Gordon Morris, managing director of Age UK Enterprises, said: "In the aftermath of a global recession many households are struggling with their finances, but those in later life are disproportionately affected, particularly in recent times.

"The impact of inflation on over-55s has been substantially underestimated and it worsens as you age, with over-75s experiencing cost rises on average 4 per cent above official measures.

"For a typical over 60-year-old, it means they are on average more than 620 a year worse off than previously thought."

n Three-quarters of couples have separate savings accounts, with many people keeping their stash secret from their partner, a survey showed.

About 78 per cent of people who are in a relationship said they had their own savings account which was separate from their partner's money, according to Halifax.

Four out of 10 people said their partner knew exactly how much they had deposited, but 51 per cent said they had only a rough idea of how much they had saved, and 10 per cent admitted that they did not even know they had their own account.

Just under half of people said they did not disclose information about their savings to their partner because they thought it was important for them both to have some financial independence.

A further 22 per cent said they liked to have a nest egg that was their own, while 12 per cent said they liked to be self-reliant.

But 12 per cent of those questioned admitted they had set aside the money in case something went wrong with their relationship.

Women are more likely to have a separate savings account than men, at 83 per cent, compared with 74 per cent of men, while at 16 per cent they are twice as likely as men to see the money as a safety net in case their relationship fails.

Unsurprisingly, younger people are most likely to have a separate savings account.