30-64 age group worst hit by inflation

Inflation rates facing all age groups rose sharply during November, according to new research from the Alliance Trust Research Centre.

The report shows that the inflation rate facing the 50-64 year olds jumped from 1.9% to 2.8% in November, matching the inflation rate faced by the 30-49 year olds. The two working age groups, the 30-49 year olds and 50-64 year olds now face a rate of inflation, at 2.8%, which is 47% higher than the official rate.

For the second consecutive month, the over 75s face the lowest rate of inflation, at 2.3%. This age group also bore the smallest increase in inflation during the month of November, helped by the fact that gas and electricity prices were unchanged. All five age groups face rates of inflation which are in excess of the official headline rate of 1.9%.

During the month, petrol prices rose 2.8%, food prices gained 1.0%, clothing prices gained 0.9% but both gas and electricity prices were unchanged.

Shona Dobbie, Head of the Alliance Trust Research Centre, said:

“As expected, inflationary trends have increased quite sharply this month, reflecting recent increases in petrol and food prices. These price moves are having the greatest impact on the two working age groups, who spend a larger proportion of their budgets on the goods and services which are seeing high price increases. The fact that the working age groups face an inflation rate of 2.8%, but average earnings have grown by only 1.2% over the last year, highlights the erosion of their purchasing power.”

Utility price inflation remains negative, according to the report, at -6.7%, whilst electricity price and gas price inflation were constant at -8.2% and -5.9% respectively. The negative rate of inflation in both of these categories helps the over 75 year olds in particular, as it is this age group which spends the highest proportion of their budgets on these services. The elderly spend more than 7% of their budget on electricity and gas bills; whereas the under 30 year olds spend just over 3% on these services.