Baby Boomers have Lowest Inflation

Young pensioners face the lowest rate of inflation as they spend their just-retired years on package holidays. While over-75s face soaring gas and electricity bills

Emma Wall 16 January, 2014 | 4:02PM

Inflation has fallen to 2% - the Government’s official target – for the first time since 2009. But while most of us have benefitted from the slowdown in the rising cost of living, not households are experiencing inflation equally.

Thanks to the differing proportional spend on essentials such as food, gas, electricity and petrol consumers aged between 30 and 39 have quite a difference level of inflation to those that are retired.

According to a report by investment platform Alliance Trust, young pensioners, those aged 65 to 74 experience the lowest level of inflation at just 1.7%. This is because the highest proportion of their income goes on items that have experienced less than average inflation – such as food and leisure activities. The Office of National Statistics (ONS) revealed that the cost of recreation and culture rose just 0.8%. This age group are also protected from some of the highest risers too – such as the cost of education, which inflated 10.3%. Younger adults spend more of their income on alcoholic beverages and tobacco, the cost of which rose 5.8% in 2013.

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About Author

Emma Wall  is former Senior International Editor for Morningstar

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