The elderly are still struggling to deal with the sky-high cost of living despite recent falls in the rate of inflation, research has found.
While the latest government figures show the Consumer Prices Index measure dropped to 4.1% in November, those aged over 75 still face an average rate of 6.7%, according to Alliance Trust.
Given that there are no savings accounts paying anywhere near this level anymore, it means retirees are essentially losing money before they’ve even spent anything.
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| Age Group | Inflation Rate |
| Under 30 | 3.7% |
| 30-49 | 3.7% |
| 50-64 | 4.3% |
| 65-74 | 5.2% |
| 75 and Over | 6.7% |
Elderly are most susceptible
The elderly face a far higher rate of inflation largely because the goods and products that they spend the largest portion of their money on are the same ones that have risen so dramitically in price recently.
For example, over 75s spend almost 7% of their budget on electricity and gas bills, compared to just 3% for under 30s. As has been well documented, gas prices shot up more than 50% in the last year, while electricity prices rose by more than 30%.
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The food factor
The elderly have also been affected by rising food bills. Food price inflation accelerated in November and prices are almost 12% higher than a year ago.
According to Alliance Trust, the elderly allocate 16% of their household budget to food whereas under 30s spend less than 9%.
As a result of such differences, inflation for the younger demographic is just 3.7% - almost half that of over 75s.
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Young spend on cheaper products
“Higher gas and electricity prices and accelerating food prices continue to hit the elderly the hardest as we enter the winter months,” explains Shona Dobbie at Alliance Trust.
“The under 30s and 30- 49 year olds continue to face an inflation rate that is lower than the official rate of inflation.
“Younger generations benefit from the fact that they spend a higher proportion of their incomes on discretionary items, such as audio visual goods, clothing and footwear, where prices continue to fall.
“Over the last year, the prices of audio-visual goods have fallen by almost 14% and clothing prices have dropped by almost 8%, reflecting heavy discounting by the major retailers.”
What these findings highlight is the importance of being adequately prepared for your retirement. You can view our free saving for retirement brochures here.
