15 April 2008

LATEST FIGURES SHOW ELDERLY HIT HARDEST BY HIGH FOOD AND ENERGY COSTS

·         Inflation rate facing the over 75 year olds now 36% higher than the official rate of inflation.

·         Under 30s age group faced the lowest level of inflation in March of 2.6%, but this is still higher than the official headline rate.

·         Food price inflation remains close to 6%, electricity prices have risen by more than 5% over the last year and petrol prices have jumped by more than 20%.

·         Alliance Trust Research Centre warns that inflation may rise further over the next few months, reflecting further pressure on prices for both food and fuel

 

Alliance Trust’s independent study of age related inflation has found that inflation hit the over 75 year olds the hardest in March – this age group faces an inflation rate of 3.4%.  Inflation rates facing all other identified age groups decreased slightly in March but still remained ahead of the official headline rate of inflation of 2.5%.

 

Age Group

Inflation Rate

Under 30

2.6%

30-49 Year Olds

2.9%

50-64 Year Olds

3.2%

65-74 Year Olds

3.2%

75 and Over

3.4%

 

 

Food price inflation has increased by almost 6% over the last year, utility prices have increased almost 4% and petrol prices have risen by 20% in the same period. These price increases have a major impact on the inflation rate facing the elderly as a significant proportion of their household income is spent on these items. In contrast, younger generations tend to spend a higher proportion of their incomes on clothing, footwear and audio-visual goods, where prices continue to fall, helping them to escape the worst of the current inflationary pressures. 

 

These findings confirm that the elevated level of inflation facing the older age groups remains in place, driven by recent price increases for food and fuel. Alliance Trust Research Centre predicts that inflationary pressures will remain strong in the coming months for basic goods and services.

 

Shona Dobbie, Head of the Alliance Trust Research Centre said, "Our study continues to highlight the extent to which the impact of inflation can differ from the official headline figure. This month we have found that the over 75s are once again the most exposed to the negative impact of high food and energy costs. Price inflation for some food groups, such as dairy products, is currently running above 15%. This impacts the elderly who spend a higher proportion of their budgets on basic food items.

 

“The problem facing all households at the moment is that it is the prices of basic goods and services which are displaying the highest level of inflationary pressure. These are the items which we buy every day and every week and so the impact on our wallets is highly visible. This makes inflation seem a lot higher than the official rate suggests. Unfortunately, we see little respite from this situation over the next couple of months as the oil price remains high and some categories of food are beginning to experience shortages on a global basis. We would not be surprised to see headline inflation rise further. ”

 

Alliance Trust’s full latest report on ‘Inflation and Age’ is available on www.alliancetrust.co.uk

You can obtain a copy of the report by emailing contact@alliancetrust.co.uk or phoning 08000 326323.

 

 

Contacts

Jane Holligan, Media Relations Manager          Anna Schirmer/ Stuart Lerman/ Anna Moulds

Alliance Trust                                                   Lansons Communications

Tel  +44 (0)1382 306064                                   Tel  +44 (0)20 7490 8828

Mobile  07745 783212                                      Email  alliancetrust@lansons.com

Email  jane.holligan@alliancetrust.co.uk

Web  www.alliancetrust.co.uk  

 

 

Notes to editors

1.       Alliance Trust is an international investment and financial services group. It is headed by Alliance Trust PLC, a FTSE 100 company and the largest generalist investment trust company listed on the London Stock Exchange. Through its subsidiaries, Alliance Trust offers investment dealing, self-invested personal pensions and a choice of investment wrappers.

 

2.       The Research Centre is part of Alliance Trust and was formed to carry out economic and social analysis to deepen our understanding of economies, markets and socio-economic issues.

 

3.       Photographs of Shona Dobbie are available.

 

4.       Inflation and Age chart illustrated below.



Inflation and Age (Jan 2006 to March 2008)