The inflation rate for elderly households was more than double the government's inflation target in 2006, according a report from Alliance Trust.
The Age and Inflation study reveals the inflation rate facing households run by people aged over 75 is consistently higher than any other age group and in 2006 the inflation rate for the elderly was 56% higher than the headline rate of inflation.
During 2006, the oldest households saw their rate of inflation increase from 2.8% in January to 4.6% in December – an increase of 64% - while the rate for the youngest age group increased from 2.1% to 3.2% - an increase of 52%.
The 30-50 year old households consistently face the lowest level of inflation – on average 55% lower than that facing the over-75s.
Alliance Trust says the levels of inflation are so high for the elderly because they spend the highest proportion on necessities, such as food and beverages and housing and utilities, so rising gas and electricity prices have had the biggest impact on them.
Shona Dobbie, head of the Alliance Trust Research Centre, says the research suggests it is inappropriate to link age-related benefits, such as pensions, to a national average for inflation.
She states: “We are concerned about the higher inflationary pressures facing older households today, whose effect is often masked by the focus on the average headline rate of inflation.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7034 2680 or email [email protected].IFAonline
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