A new study by Alliance Trusts has found that inflation hits pensioners harder than those under 30. The biggest difference in personal inflation was between homes run by the elderly (those over 70) and homes run by the under 30's, where inflation was, on average, 67% lower. Inflation experienced by the elderly was at least a third more than the national average. The survey showed that older people face higher inflation due to the fact that they spend more on health-related products and insurance, and fuel such as gas and electricity. The report highlights the fact that people need to be aware that when buying a pension now, it may not be worth the same value in years to come. The elderly are seeing their spending power drop more quickly than the young, while living on a reduced or fixed income.
Our view:
Is it any wonder given the most pensioners have incomes that increase with infation or indeed for many have no increases whereas earnings (i.e. for workers) generally increase faster than inflation.