SAGA PRICE INDEX REVEALS STEADY IMPROVEMENT FOR OLDER GENERATIONSTuesday 12 February 2013
12th February, 2013: Inflation on the Consumer Prices Index (CPI) remained unchanged for the fourth month in a row, standing at 2.7% in January. This is the longest period for which the CPI has remained stable which is good news for older consumers who will be comforted that prices remain steady and lower compared to much of last year. However, while CPI-based inflation is marginally less for those aged 50-74 than for the UK as a whole, Saga’s Price Index revealed that inflation is in fact higher for the over-75s, standing at 3%.
SAGA PRICE INDEX REVEALS STEADY IMPROVEMENT FOR OLDER GENERATIONS
Saga’s Index calculates that annual CPI inflation for the over 50s age bands in January 2013 was as follows (December 2012 figures in brackets):
• 50-64: 2.6% (2.6%)
• 65-74: 2.4% (2.3%)
• 75 and over: 3.0% (3.0%)
On the Retail Prices Index (RPI), annual inflation stood at 3.3% in January 2013, up slightly from 3.1% in December with the largest upward inflationary pressures coming from alcohol and air fare increases. Saga’s research has shown that compared with 12 months ago, gas prices were 5.2% higher this January, while electricity prices were 3.9% higher. Food price inflation also picked up from 3.8% in December to 4.2% in January. Despite these increases, RPI inflationary pressures on the over 50s are marginally less than for the UK as a whole, albeit slightly higher than they were for the month previously:
• 50-64: 3.0% (2.9%)
• 65-74: 3.0% (2.8%)
• 75 and over: 3.1% (3.0%)
The cost of living in January this year, compared to September 2007 - when the financial crisis started to really get underway – has risen substantially more for the over-50s than the overall population, on the broad-based RPI measure of prices. While younger age groups benefitted greatly from falling mortgage interest payments as the Bank of England cut interest rates during the recession, older age groups in general failed to benefit from this. Compared with September 2007, the cost of living has risen for different age bands as follows:
• 50-64: 20.8%
• 65-74: 23.7%
• 75 and over: 24.4%
• Whole population (RPI): 18.2%
Commenting on the figures, Paul Green, Saga's director of communications, said: “The Saga Price Indices show a small increase to inflation levels for people over 50. Although, over the past five years, people over 50 have seen prices increase by more than 20%, it is therefore important that living costs remain stable and low if older age groups are to benefit.”
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