The UK's retired population is being hit harder than ever by rising inflation, according to the Alliance Trust Research Centre's monthly alert, based on its ongoing ‘Inflation and Age' study.
The rate of inflation facing the over 75s is now at its highest level since Alliance Trust Research Centre’s study began in January 2003.
In July, the over 75s were hit by ongoing increases in the cost of both gas and electricity, plus a substantial increase in the cost of health insurance.
Shona Dobbie, head of the Alliance Trust Research Centre, said: “With the cost of gas and electricity on the up, the impact of these rises will affect the elderly more than the average population.
"The over 75s in particular spend a greater proportion of their monthly budget on these goods and services. To make matters worse - we have seen more energy price hikes in the past few weeks and there could still be more to come. Unfortunately this will always hit the elderly the hardest as the impact of energy price rises for these households is at least twice as large as for those of working age.
“The official CPI model estimates that the average household spends 11% of their budget on housing, water, electricity and gas, yet the Alliance Trust Research Centre’s age-related inflation model estimates these together account for more than 16% of spending for elderly households.
"The official headline inflation rate therefore does not necessarily paint a true picture of the actual impact of inflation experienced by the over 75s and this mismatch should be reflected in any inflation-linked benefits.”
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