Inflation rate facing the elderly has surged to 4.1%

Alliance Trust's independent study of age related inflation has found that inflation surged in April and hit the over 75 year olds the hardest - this age group now faces an inflation rate of 4.1%. Inflation rates facing all other identified age groups have also increased and the majority are running ahead of the official headline rate of inflation of 3.0%.

Food price inflation has increased by more than 7% over the last year, utility prices have increased by over 8% and petrol prices have risen by 19% 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, and is worsening, 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 highlights the extent to which inflationary pressures are hitting the elderly hardest. Once again, we have found that the over 75s are the most exposed to the negative impact of high food and energy costs. Food prices are now rising at a general rate of 7%, but in the case of some food groups, such as dairy products, inflation is running as high as 16%. This affects the elderly in particular, as these households spend a higher proportion of their budgets on basic food items.

"We still face the problem that it is the prices of basic goods and services which are displaying the highest inflationary pressure. When everyday items are going up in price, the impact on our wallets is highly visible to us all. The official headline rate of inflation rose considerably this month, but in the case of food and energy the situation is even worse, and this leaves us with less money to spend on the items where prices continue to fall. Unfortunately, we see little respite from this situation over the next couple of months as the oil price is expected to remain high and there are global shortages of some foodstuffs. Headline inflation is likely to rise a bit further in the short term."