Over 50s experience Inflation 24% higher since start of recessionTuesday 18 February 2014
Paul Green, Saga’s director of communications said “Whilst it is good news that inflation has edged down, however the benefits are certainly not universal. Inflation experienced by older age groups has been almost a quarter higher than for the population as a whole since the start of the recession and this has put the squeeze on the very tight budgets that many older people have to work within.”
Over 50s experience Inflation 24% higher since start of recession
- Consumer Price Index (CPI) annual inflation was 1.9% in January, just down from 2.0% in December 2013.
- Retail Price Index (RPI) annual inflation stood at 2.8% in January, just up on 2.7% in December 2013.
- The largest downward contribution to the CPI inflation rate came from recreational goods & services, furniture & household goods and alcoholic beverages & tobacco.
- Given that expenditure patterns vary across households, experienced inflation rates will differ across age-bands. We calculate that annual consumer price index (CPI) inflation was as follows for the over 50s age bands in January 2014 (December 2013 figures in brackets):
50-64: 1.8% (1.9%)
65-74: 1.7% (1.8%)
75 and over: 2.1% (2.2%)
- We calculate that annual retail price index (RPI) inflation was as follows for the over 50s age bands in January 2014 (December 2013 figures in brackets):
50-64: 2.4% (2.4%)
65-74: 2.4% (2.4%)
75 and over: 2.4% (2.4%)
Figures 1 and 2 illustrate the annual rates of inflation for the over-50s. Annual CPI-based inflation is lower for 50-64 and 65-74 age brackets than for the UK population as a whole. The rate of inflation faced by the over-75s fell from 2.2% for December 2013 to 2.1% in January, in part driven by falling utility prices which make up a relatively large proportion of expenditure for this age group. For example the annual rate of inflation for gas fell to 6.7% in January from 7.8% one month earlier.
- Between September 2007 - when the financial crisis started to really get underway - and January 2014, the cost of living has risen substantially more for the over-50s than for 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 – who had largely or entirely paid off their mortgages – in general failed to benefit from this. Compared with September 2007, living costs have risen for different age bands as follows:
75 and over: 27.4%
Whole population (RPI): 21.4%
Saga's flash inflation index contains full report and graphs
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