Pensioners get poorer every year – especially those with a high reliance on the state pension.

The State Pension is means tested. I pay income tax at the marginal rate on mine effectively returning 40% of the pension from whence it came. I do this willingly. I acknowledge that although I am entitled to the Pension I have other income sources and rely on the state less than some others. As for its quantum in Britain we have a slightly different model than some other European countries. The state pays my baby boomer generation less but I have more from my workplace pension which was final salary based, inflation-proofed and secure. I also pay tax on this of course.

The problem for many is that both the state and workplace pensions are inadequately inflation proofed. Even with the triple lock the state pension loses its purchasing power every year. Similarly workplace pensions linked to an inflation index such as RPI or CPI decline in useful value every year. The reason for this rarely-acknowledged fact is that Pensioner inflation always exceeds that of the price indices. Indices are based on baskets of goods and services for the population at large, but what pensioners need to spend their money on is different.

If you search for it you can find an official index of Pensioner inflation, though it’s a bit hidden away! Odd that ! The money we pensioners spend on utilities is higher than that of the wider population. Similarly falling interest rates benefit us little as many of us no longer have mortgages. Poorer pensioners especially are disadvantaged with state pension increases not matching the inflation they actually experience.

The myth of gold-plated baby boomer pensions needs to be busted. And it’s also time we started comparing our total pensions receipts (state plus workplace) internationally and not just our lower state pension. The subject of pensions has always generated more heat than light. Time we started more fact based analysis and commentary.