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Inflation is Hurting the Elderly
By Gareth Vorster, IFA online
United Kingdom
June 1, 2005
Monthly inflation is 67% higher for over-75s running a household compared with people aged under 30, a new study indicates.
Research entitled Inflation and Age conducted over the past two years by investment firm Alliance Trusts found inflation inflicted on the elderly is at least a third more than the national average.
Alliance Trusts says in April 2004, the inflation difference between over-75s and those people aged under 30, peaked at 136%, while the lowest recorded difference was still at 28%.
Chief executive at Alliance Trusts, Alan Harden, says the spending power of the elderly is falling substantially, at a time when many of them rely solely on a limited, or a fixed income.
He says: "The results of our study lead us to ask if it is appropriate to link benefits for older people to a national, or average, index. State benefits or defined benefit plans that are linked to a broad inflation measure are likely to work to the disadvantage of the elderly."
According to Alliance Trusts, the elderly face higher inflationary levels because of a higher proportion of spending on food and non-alcoholic drinks (19%), compared with 9% from those people under 30.
The firm adds elderly people are more likely to purchase health-related products and insurance, along with having to deal with ballooning utilities bills in relation to increasing fuel, electricity and gas prices.
Meanwhile, many of the younger generation will fork out for clothes and shoes and electronic appliances, areas of spending which are in sharp decline.
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