Inflation might be on the way down, but pensioners are feeling the pinch more than younger generations.

The over-75s were hit with an effective rate of inflation of 5.4% in January — 80% higher than the official 3%, Alliance Trust said.

The prices of goods and services they use most — food and fuel — have soared in the past year, but they have not benefited from the fall in clothing and technology.

Here, we offer advice:

Cut your energy costs

Energy firms have started a new round of price cuts. British Gas cut its standard gas bill by 10% last month, followed by Scottish & Southern, Eon and EDF.

If you signed up to a fixed energy deal late last year or at the start of 2009, when prices peaked, you could save hundreds of pounds by switching.

The most expensive fix at the start of the year was £1,428 a year for dual fuel with British Gas’s Fixed Price 2012 tariff. The cheapest online plan today, also from British Gas with its Websaver 2 tariff, is £1,055. You pay £70 to leave early, but still save £303 a year.

Use price comparison sites such as energyhelpline.com and uswitch.com.

Get the best deal on your groceries

Although supermarkets charge to deliver, buying your weekly groceries online can generate big savings. Mysupermarket.co.uk lets shoppers compare the cost of a weekly shop at Tesco, Asda, Sainsbury’s and Ocado.

Check cashback and voucher-code sites, too. You can get £5 off a shop at Tesco via topcashback.co.uk.

Boost your pension

Retired people face a double whammy: pension-fund values have slumped and rates on annuities — which provide an income for life — have tumbled as interest rates have fallen. A 65-year-old man with a £100,000 fund could have bought an annuity of £7,920 a year in July 2008, against £7,310 earlier this month.

Nigel Callaghan of adviser Hargreaves Lansdown said you should not automatically accept the annuity offered by your pension company — shopping around could boost your income by 20% a year. It might also be worth splitting your pension and converting only part of it into an annuity in case rates recover.

Even those who keep their pension invested after retirement through an income-drawdown scheme, instead of buying an annuity, face problems: the maximum annual withdrawal was cut from 4.75% to 3.75% last week.

John Lawson of insurer Standard Life said: “Consider being more active with your retirement fund to get higher levels of income — you could use flexible ‘drip-feed drawdown’ to take income as a combination of tax-free cash and taxable income.”

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