According to research carried out by the society, the recent energy and food price hikes are impacting on the 'real' rate of inflation faced by retirees, pushing it up to more than double the estimated national inflation rate.
The increases of 15 per cent and 12 per cent respectively mean that even if all other items paid for by pensioners retain the predicted inflation rate of 3 per cent, these increases alone will see pensioners faring the worst of all consumers.
Additonal increases in Council Tax bills of around 4 per cent will further compound this financial pressure.
Those already having to live off a budget squeezed by the credit crunch will find the going gets a lot tougher over the course of 2008, with equity release becoming less of a choice and more of a necessity to free up extra cash and help living expenditure.
Indeed in a recent survey conducted by the society, 59 per cent said they would turn to equity release to 'improve the quality of their everyday life.'
Bob Mottershead, retail sales executive at Newcastle Building Society, said: “These findings paint a bleak picture for pensioners in 2008. The rising cost of living is undoubtedly a concern for us all, however, commonly it is those in later years who suffer the most.
“Over the past year alone we have found equity release is becoming increasingly popular as more asset-rich, cash-poor retirees struggle to make ends meet.”
