U.K.: Elderly Bear Brunt of Inflation

LONDON (Financial Times Adviser), August 18, 2006: Rising inflation is hitting the elderly the hardest, data on the cost of living has shown. The Alliance Trust has based its conclusions on an analysis of official inflation figures from the Office for National Statistics (ONS). The ONS had found that in the year to July, the consumer prices index rose by 2.4%, down from 2.5% in June. Alliance Trust said that although this headline rate of inflation fell, the inflation facing the over 75s increased to 3.7%, fuelled by increases in gas and electricity prices. It said that pension should be linked to this rise in the cost of living for retired people. Shona Dobbie, head of the Alliance Trust’s research centre, said there could be more energy price hikes to come. “Unfortunately this will always hit the elderly the hardest as the impact of energy prices rises for these households is at least twice as large as for those of working age,” she said. Alliance Trust said that the rate of inflation facing the over 75s was now at its highest level since its study began in January 2003. Ms Dobbie said that the official inflation rate “does not necessarily paint a true picture of the actual impact of inflation experienced by the over 75s and this mismatch should be reflected in any inflation-linked benefits”. By Christopher Marshall © Copyright Financial Times Business Limited - 2006.