PENSIONERS are having to fork out more for their everyday living expenses than any other age group. And costs are also spiralling for those who need care and support from the State.

Households where the occupants are 65 and over are spending more on housing, fuel, and basic goods like food and toiletries, than younger households, reveals Prudential. Between 2002 and 2006, the amount spent by this age group on living expenses grew 10 per cent per year as opposed to a national average of 4 per cent.

"Many pensioners are facing difficulties and this is exacerbated by the rising cost of food," says Gary Shaughnessy, managing director at Prudential Retail Life and Pensions.

Pensioners allocate a much higher percentage of their annual income to food than the average household. Dairy products, vegetables and fish are up to 15 per cent more expensive this year, but with state pensions rising just 3 per cent annually it's not surprising older people are feeling the pinch.

Mortgages and other debts are also adding to the burden. Scottish Widows reveals one in five retired homeowners have an outstanding mortgage debt of £38,000. And when it comes to personal loans and credit cards, the average outstanding balance owed by older people is almost £6,000.

But it's not just fit and able retirees who face rising costs. Older people who need support with health problems face an ever-tightening squeeze when trying to access care services. To get paid help you must pass the strict criteria of your local authority. Those not eligible have to make do with over-stretched voluntary services or are forced to pay privately for their care, often relying on the goodwill of friends and relatives.

A survey from the charity Counsel and Care shows almost a fifth of local authorities further tightened their criteria for providing paid care services in 2007 because of budget pressures. And three quarters only provide for older people with substantial or critical needs, largely leaving those with moderate health problems to fend for themselves.

"There is an urgent need for realistic funding of preventative services in order to keep the care system afloat, as more local authorities continue to raise their criteria to the highest levels," says Stephen Burke, chief executive at Counsel and Care. "Without active intervention, care and support will collapse under the strain of an ageing population and increased demand."

Care allowances If you, or an ailing relative, need care and support, there are a number of benefits you may be entitled to. The following list is not comprehensive, so check with a specialist adviser for further guidance.

Attendance Allowance. This is the main disability benefit for people aged 65 and above. It is non-means tested and non-taxable. It is paid weekly at the lower rate of £43.15 if care is needed by day or night, or at the higher rate of £64.50 if care is needed by day and night.

Twelve Week Property Disregard and Deferred Loan Agreements. The local authority must disregard the value of your home for the first 12 weeks of residential care and contribute towards your care fees if your other capital is below £21,500.

Council Tax Exemption. If you move into a care home and nobody is living in your previous home, your property should receive full exemption from Council Tax until it is sold.

NHS Funding in Nursing Homes. The NHS will pay a Registered Nursing Care Contribution towards nursing home fees, or you could get full NHS funding if you meet the health authority's eligibility criteria.

Aftercare. Older people with mental illness who are admitted to hospital for assessment and treatment may, on discharge, be entitled to funded aftercare. This can include the full cost of a place in a nursing home.

Source: NHFA

Free copies of the Echo guide to finding and funding a care home, sponsored by NHFA, can be obtained by calling 0870 834 7593. Calls cost less than 8p per minute from a BT landline.