Older people affected worst by inflation
This month’s official figures show that inflation has fallen from 4.8 per cent to 4.2 per cent but two new studies show that older age groups suffer the most from high inflation, and at 4.2 per cent it is still well above the government’s 2 per cent target.
Saga’s monthly Price Index shows that since the onset of the credit crunch in 2007, over-50s in the UK have experienced cumulative annual inflation of 20 per cent compared with around 15 per cent for the population as a whole.
Commenting on the latest inflation figures, Saga’s director general Ros Altmann commented that retail price inflation for the over 50s is still around 5.5 per cent, which is significantly higher that the nation’s average of 4.8 per cent.
Meanwhile, Alliance Trust’s monthly study of inflation rates also shows that older age groups are worst affected.
Although the Alliance Trust found that inflation rates slowed for all households over the month, the over-50s are suffering an inflation rate that is higher than the official rate of 4.2 per cent.
According to Alliance Trust’s figures, the inflation rate for people over 75 fell from 5.6 per cent in November to 5.1 per cent in December, and for the 65-74 age group inflation fell from 5.5 per cent in November to 5.0 per cent in December.
In comparison, inflation fell to 4.6 per cent for people between the ages of 30 and 49 in December.
Older age groups allocate a larger proportion of their income to energy costs and they were helped in December by a fall in gas price inflation from 25 per cent to 20 per cent, while electricity price inflation fell from 16 per cent to 14 per cent.
It is estimated that people over 75 allocate 9 per cent of their household spending to gas and electricity compared with 4 per cent allocated by people under the age of 30.
Older age groups also spend a greater proportion of their income on food and are therefore worst affected by food price inflation, which remained stable in December, at around 4 per cent.
Petrol price inflation fell from 13 per cent to 9 per cent in December, pushing down inflation for all age groups but particularly those aged between 50-65, the group allocating the largest proportion of their budget to petrol.