Inflation rate for elderly ‘much higher than CPI'

The cost of living for pensioners remains much higher than the Government's official inflation measure, according to Alliance Trust Research Centre.

The investment firm's monthly study of age-related inflation shows that in July, the inflation rate for over 75s stood at 2.8% - 56% higher than the official rate of inflation of 1.8%.

Meanwhile, those between 65 and 75 years old face an inflation rate of 2.3%.

Alliance Trust says retired households spend a higher proportion of their budgets on basic goods and services, such as utilities and food, where price inflation remains relatively high.

During the month, gas prices fell 0.4%, electricity prices were unchanged and food prices fell back 0.6%, but the recent surge in the oil price resulted in a 0.7% rise in petrol prices.

"It is disappointing to see that inflationary pressures facing the elderly have not receded this month," says Shona Dobbie, head of the Alliance Trust Research Centre.

"The benefits of falling prices are still coming through more slowly for the elderly, who spend a larger share of their budgets on basic goods and services," she adds.

Official figures show that CPI inflation remained steady at 1.8% in July, surprising many analysts who had forecast a fall to 1.5%.