Elderly hit hardest by high food and energy costs

Inflation hit the over 75 year olds the hardest in March - this age group faces an inflation rate of 3.4%, according to a study by Alliance Trust. Inflation rates facing all other identified age groups decreased slightly in March but still remained ahead of the official headline rate of inflation of 2.5%.

Food price inflation has increased by almost 6% over the last year, utility prices have increased almost 4% and petrol prices have risen by 20% in the same period. These price increases have a major impact on the inflation rate facing the elderly as a significant proportion of their household income is spent on these items. In contrast, younger generations tend to spend a higher proportion of their incomes on clothing, footwear and audio-visual goods, where prices continue to fall, helping them to escape the worst of the current inflationary pressures.

These findings confirm that the elevated level of inflation facing the older age groups remains in place, driven by recent price increases for food and fuel. Alliance Trust Research Centre predicts that inflationary pressures will remain strong in the coming months for basic goods and services.

Shona Dobbie, Head of the Alliance Trust Research Centre said, "Our study continues to highlight the extent to which the impact of inflation can differ from the official headline figure. This month we have found that the over 75s are once again the most exposed to the negative impact of high food and energy costs. Price inflation for some food groups, such as dairy products, is currently running above 15%. This impacts the elderly who spend a higher proportion of their budgets on basic food items.

"The problem facing all households at the moment is that it is the prices of basic goods and services which are displaying the highest level of inflationary pressure. These are the items which we buy every day and every week and so the impact on our wallets is highly visible. This makes inflation seem a lot higher than the official rate suggests. Unfortunately, we see little respite from this situation over the next couple of months as the oil price remains high and some categories of food are beginning to experience shortages on a global basis. We would not be surprised to see headline inflation rise further."