ONS: Inflation dropped in May

20 June 2012

Older homeowners struggling to make ends meet as a result of high inflation coupled with a record low base rate of interest will welcome the news inflation dropped during the month of May.

According to data released by the Office for National Statistics (ONS), inflation fell from three per cent to 2.8 per cent in May, although it remains some distance above the target of two per cent.

Some older people may still be struggling to pay their bills and there are a wide range of options on the table to help them raise the money that will see them enjoy a more comfortable retirement, with lifetime mortgages among the products on the market that could help.

These allow homeowners aged between 55 and 95 to unlock some of the money that is trapped in the value of a property and individuals could see their financial position boosted as a result.

Inflation pressures

The ONS noted motor fuels and food and non-alcoholic beverages were among the main pressures forcing inflation down over the course of May, while air and sea transport were highlighted by the body as pushing inflation up during the month.

Kevin Mountford, head of banking at MoneySupermarket.com, stated the fall in inflation - which has been steadily dropping from a high of five per cent in September last year - will be welcomed by savers who are struggling to get a return on their investments.

"This should really offer a boost to those struggling to gain any real returns on their savings pots. The news should also provide encouragement for people to start saving again, especially those whose New Year resolutions to save more may have fallen by the wayside," he said.

Inflation falling

Kames Capital's joint head of fixed income and manager of the Kames Inflation Linked Fund Stephen Jones added inflation is now falling at a faster pace than had been anticipated by experts a few months ago, with the two per cent target now within sight.

Those homeowners who want to find out more about how they can unlock money from the value of their house may find the equity release calculator from Key Retirement Solutions to be useful.