Inflation hits the elderly harder.
Older people are more likely to be affected by inflation than younger groups.
A survey by Age UK Enterprises has found that inflation takes a higher toll on the elderly than any other age group.
The charity’s commercial arm says inflation is steeper on the elderly because they spend the majority of their money on food and fuel. The group say their research shows the real cost of inflation for UK residents over the age of 55 is much higher than that estimated by the official RPI measure.
Age UK Enterprises has produced its own measure of inflation for those over 55 years old which is called the Silver RPI. The Silver RPI is calculated by assessing the proportion of income spent by each age group on various items and how much these items have increased in price over a period of time.
The body claims the Silver RPI rises to 4.1% above the government measure of inflation for those over 75 years of age. This reflects a significant difference and backs up similar research which shows that the gap between inflation costs for the elderly and the rest of the nation has widened significantly in the last 2 years.
One factor thought to be behind the widening gap is the recent fall in mortgage interest rates – something which many elderly residents won’t have been affected by. This fall has meant that the cost of living for the elderly hasn’t dropped as much as for the rest of the population in general.
Recent increases on utility and energy rates are also have thought to have had a significant effect on the cost of living for the elderly.
“In the aftermath of a global recession many households are struggling with their finances but … the impact of inflation on over-55s has been substantially underestimated and it worsens as you age”, commented the managing director of Age UK Enterprises.
“The Silver RPI suggests that for too long official measures have misrepresented how finances look for those in later life by considering over-55s as one single group who experience money (and inflation) in the same way”.
For more information on the Silver RPI, visit the Age UK website.