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Oldest and youngest suffer most at hands of inflation

Oldest and youngest suffer most at hands of  inflation

The over-75s and under-30s faced the highest rate of inflation in January at 2.1%, according to a report.

The over-75s suffered the highest rate of inflation for the whole of 2013 and this trend continues into 2014, as they spend a larger share of their budgets on basics such as gas and electricity, according to the Alliance Trust.

But the monthly research by the Dundee-based trust found that 65 to 74-year-olds have faced the lowest rate of inflation in 11 out of the last 12 months, thanks to lower inflation in food, petrol and package holidays.

This month’s official inflation report showed that the headline rate of inflation fell from 2% to 1.9% for the first time in more than four years.

But inflation as measured by the Retail Prices Index rose to 2.8% from 2.7% in December, the Office for National Statistics (ONS) said.

The lower headline rate of inflation was in large part due to a fall in the cost of recreational and cultural activities, including falling DVD prices and lower entrance fees to attractions.

The trust’s monthly study of inflation rates affecting different age groups found that three out of five age groups have an inflation rate lower than the official figure.

The 30 to 49-year-olds, 50 to 64-year-olds and 65 to 74-year-olds all have an inflation rate of 1.8%.

However, with gas price inflation falling from 7.8% to 6.7% and electricity price inflation falling from 8.1% to 8.0%, the pressure on the over-75’s budgets eased slightly in January.

However, the over-75s have now been joined by the under-30s in facing the highest rate of inflation, at 2.1%.

Many under-30s are also facing the highest inflation rate due to the continued effect of the sharp increase in tuition fees outside Scotland in 2012. This has kept education price inflation at 10.3% for the last four months and continues to keep the under-30s inflation rate high, even though they spend less on food and energy than older people. The remaining age groups, the 30 to 49, 50 to 64 and 65 to 74-year-olds are benefiting from inflation below the headline rate, helped by lower fuel price inflation, which continued to fall in January from -1.4% to -1.8%.