19th March, 2013: Inflation on the Consumer Prices Index (CPI) rose marginally, standing at 2.8% in February. People over 50 have also seen a slight increase in inflation as the upward contributions from gas and electricity bills and price changes to recreational goods, motor fuels and air transport took hold. People over 75 specifically are suffering disproportionately from a higher level of inflation compared to the country as a whole. This reflects the fact that those over 75 have been relatively more affected by rising utility prices. Electricity prices were 6.4% higher in February compared to a year ago, while gas prices were 7.2% higher.
Saga’s Index calculates that annual CPI inflation for the over 50s age bands in February 2013 was as follows (January figures in brackets):
• 50-64: 2.7% (2.6%)
• 65-74: 2.5% (2.4%)
• 75 and over: 3.0% (3.0%)
On the Retail Prices Index (RPI), annual inflation stood at 3.2% in February 2013, down from 3.3% in January. RPI inflationary pressures on the over 50s are marginally less than for the UK as a whole, and remain steady on the previous month:
• 50-64: 3.0% (3.0%)
• 65-74: 3.0% (3.0%)
• 75 and over: 3.1% (3.1%)
The cost of living in February 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: 21.7%
• 65-74: 24.4%
• 75 and over: 25.0%
• Whole population (RPI): 19.0%
Commenting on the figures, Paul Green, Director of Communication, Saga said: “The Saga Price Index continues to show that older people are experiencing higher inflation than other age groups. While the CPI for people over 50 shows marginally lower levels than the nation as a whole, those over 75 are still disproportionately affected by rising heating costs. Given that there has been such a cold-snap at the end of winter, the cost of this harsh winter could well be felt long into the summer for many older consumers, further affecting their purchasing power.
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.”