Inflation surges for older people
12/08/2008
Alliance Trust’s independent study of age related inflation has found that the over 75 year olds continue to be hit the hardest by surging inflation, and the pain is getting worse. This age group saw their inflation rate surge from 5.4% to 6.3% in July. The inflation rates facing all other identified age groups have also increased sharply and the majority are now in excess of 5%, well ahead of the official rate of 4.4%.
Age Group - Inflation Rate
Under 30- 4.4%
30-49 Year Olds - 5.0%
50-64 Year Olds - 5.4%
65-74 Year Olds - 5.8%
75 and Over - 6.3%
The over 75 year olds are hit hardest by higher electricity and gas prices which have both increased by around 13% over the last year.
This age group spends almost 7% of their budget on electricity and gas bills whereas the under 30 households spend just 3% on such utilities.
Over 75 year olds have also suffered from the ongoing surge in food prices, which have increased by almost 14% over the last year. This hits the over 75 year old age group hardest as they allocate 16% of their household budget to food compared to less than 9% for the under 30 households. Inflation for many staple foods is even higher, with bread & cereal and meat prices all having increased by 16% over the last year, and with dairy, cheese and egg prices up by 19%.
Although everyone is facing a high rate of inflation at this time, younger generations benefit from the fact that they spend a higher proportion of their incomes on discretionary items, such as audio visual goods, clothing and footwear, where prices are continuing to fall. Over the last year, the prices of audio-visual goods have fallen by almost 12%, and clothing prices have dropped by more than 7%. The under 30s spend 6% of their budget on clothing, which is almost double the amount allocated by the over 75 year olds. The inflation rate facing the under 30s is the lowest of all the age groups, matching the official rate of inflation of 4.4%.
Kate Jopling, Head of Public Affairs at Help the Aged, says: “The cost of living for pensioners is going through the roof. On a fixed income with little hope of pulling themselves out of financial difficulty, many are forced to cut back further and further, watching their quality of life deteriorate before their very eyes.
“The true rate of inflation for those on the lowest incomes is likely to be much higher than the figures released today. Older people spend more of their money on the very items which are going up the most.
“2.5 million pensioners already live in poverty and 1.4 million live in deep poverty. It’s high time the Government took the bull by the horns and ensured older people get all the benefits they’re entitled to - more than £5 billion goes unclaimed each year, lining the pockets of the Treasury instead of helping the older people who need it just to get by.
“The Government has known for a while that automatic payment of benefits could lift a huge number of older people out of poverty – what’s needed now is the political will to make it happen.”