MILLIONS of elderly people will be worse off next year due to changes in the way annual pension increases are calculated, campaigners warned yesterday.

In 2010 the Tory-led coalition government ended the link between pensions increases and the retail price index (RPI) measure of inflation and changed to the consumer price index (CPI), which is lower because it does not consider housing costs.

Pensions are increased in line with inflation in September, but this year the CPI was -0.1 per cent. RPI in September was 0.8 per cent.

National Pensioners Convention general secretary Dot Gibson said the change had a “dramatic effect” on elderly people’s income.

“Next year millions of older people are going to struggle with the rising costs of living.”