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CampaignsAge DiscriminationElderly still suffer highest rate of inflation despite inflation easing for all age groups
CampaignsAge DiscriminationElderly still suffer highest rate of inflation despite inflation easing for all age groups Elderly still suffer highest rate of inflation despite inflation easing for all age groups
13/12/2011
The latest figures from the Alliance Trust Research Centre show that all households saw a decline in their inflation rates in November. However, the elderly households continue to face the highest rates of inflation. The over 75 year old households faced an inflation rate of 5.6% in November, down from 5.8% in October.
The 65-74 year old households faced an inflation rate of 5.5%, down from 5.8% in the previous month.
Gas price inflation increased to 25% in November and electricity price inflation rose to 16%, the highest levels for both since March 2009.
The under 30 households have the lowest rate of inflation at 4.9%, down from 5.2% in October.
This month’s official inflation report showed that the headline rate of inflation eased from 5.0% to 4.8%.
Alliance Trust’s monthly study of inflation rates affecting different age groups also shows that inflation rates slowed for all households over the month. However, despite this, all five age groups continue to face an inflation rate that is higher than the official rate of 4.8%.
Despite headline inflation easing over the month, it is still the elderly households that face the highest rates of inflation. The over 75 year old households face an inflation rate of 5.6%, down from 5.8% in October, whilst the inflation rate for 65-74 year old households eased from 5.8% to 5.5% over the month.
Further increases in gas and electricity prices continue to put pressure on elderly households’ inflation rates. Gas price inflation accelerated from 24% to 25% and electricity price inflation rose from 15% to 16%.
Increases in the price of these utilities have a significantly greater impact on the older age groups, as these households allocate a significantly larger proportion of their spending to such utilities.
The over 75 year olds allocate around 9% of their household spending to gas and electricity compared to just 4% allocated by the under 30 households.
Encouragingly, all age groups saw a decline in their inflation rates in November, helped by lower food and petrol prices. Food price inflation eased from almost 5% to under 4% and petrol price inflation fell from over 15% to 13%.
The under 30s continue to face the lowest rate of inflation at 4.9%, down from 5.2% in October. This is because this age group allocates 19% of their household spending to rent, which is significantly more than any other age group, at a time when inflation in this category is low, at less than 3%.
Linsey Thomson, Senior Economic Analyst, said: "In particular, it is the elderly households which continue to suffer the highest rates of inflation due to electricity and gas price increases impacting these households disproportionately.
At the same time, however, it is encouraging to see headline inflation easing as this will provide a bit of relief to households which have been suffering a loss of purchasing power for some time now. Having said that, with wage growth still subdued, households of working age continue to suffer a loss of real earnings, and for this reason the outlook for consumer spending continues to look muted as we go into 2012.”