Elderly inflation remains high

Despite a fall in the rate of inflation this week, price inflation remains high for the elderly.

The latest figures from the Alliance Trust Economic Research Centre show that, despite a fall in the rate of inflation in January, elderly households continue to experience the highest levels of price inflation.

Over 75 year old households faced price inflation of 4.3% in January, down from 5.1% in December.

This now represents the lowest level of price inflation for these elderly households since December 2010. Despite this, inflation at this level is quickly eroding the buying power of fixed pension incomes and savings.

Inflation tends to be highest for elderly people due to the nature of the goods and services they consume.

It is important to plan for this as inflation can quickly erode the purchasing power of incomes and savings in later life.

One aspect to carefully consider is care fees inflation.

We often find that the annual increase in the cost of care fees will consistently outstrip price inflation in general and even price inflation for elderly households.

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Photo credit: Flickr/ell brown