Saga Flash Inflation indices – March 2014 bulletin
- Consumer Price Index (CPI) annual inflation was 1.6% in March, down from 1.7% in February.
- Retail Price Index (RPI) annual inflation stood at 2.5% in March, down from 2.7% in February.
- The largest contribution to the fall in the rate came from transport (principally motor fuels) with other smaller effects from the clothing and furniture &household goods sectors.
- 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 March 2014 (February 2014 figures in brackets):
- 50-64: 1.5% (1.6%)
- 65-74: 1.4% (1.5%)
- 75 and over: 1.9% (2.0%)
- We calculate that annual retail price index (RPI) inflation was as follows for the over 50s age bands in March 2014 (February 2014 figures in brackets):
- 50-64: 1.9% (2.3%)
- 65-74: 2.0% (2.3%)
- 75 and over: 2.2% (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, but is higher than the UK average for those aged 75 and over. This reflects the fact that, although utility price inflation has eased since the end of 2013, it remains high and is an ongoing significant cost pressure for the oldest households in the UK. In March 2014, electricity prices were 6.7% higher than the same month a year ago, while gas prices were 5.6% higher.
- Between September 2007 - when the financial crisis started to really get underway - and March 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:
- 50-64: 24.6%
- 65-74: 27.5%
- 75 and over: 28.1%
- Whole population (RPI): 22.5%
Saga's full inflation report contains full data and graphs