You are here: Home - Household Bills - News -

Supermarket price war eases inflation for over 65s

Written by:
Price wars between Britain's supermarkets are easing the cost of living for the over 65s, according to research.

The study, which dug deeper into the real inflation rate facing different generations across the UK, found people over 65 experienced the lowest level of inflation – 0.3%. This is compared to 0.9% for Millennials (under 30s), and 0.4% for both Generation X (30-49 year olds) and Baby Boomers (50-64 year olds) in the 12 months to March 2016.

Fidelity International, who carried out the research, said the over 65s spend a much higher-than-average share of their income on groceries and non-alcoholic beverages than other generations, and so are “benefiting from the year-on-year deflation driven by the ongoing supermarket price war”.

This generation spends more than any other group on healthcare, which increases their inflationary impact to 0.7%, the report said. However, this is softened by spend on categories which experience lower inflation such as alcohol, tobacco, and electricity.

Older generations are also far less likely to suffer from the inflationary impact of rising rents and education costs, which are felt most by the under 30s who spend 19% of their income on rents.

Richard Parkin, head of retirement at Fidelity International, said “Supermarket price wars are keeping the cost of living down for the over 65s who ring up a bigger portion of their income at the tills. The over 65s are seeing their spending power reducing at a slower rate than other age groups.

“However, their expenses are not immune to price hikes. And in retirement, an increase in prices could have a significant impact on people’s standard of living. As people approach retirement, it is important to ensure you have a stream of inflation-proofed, guaranteed income to cover essential expenses; be it through an annuity, a DB scheme or your State Pension. This means that even if you need to cut back on luxuries in retirement, you always know you have enough for the necessities of life.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Investors in line for post-Brexit dividend bonanza

Income investors could be in line for a dividend bonanza as a result of sterling tumbling post-Brexit, according to the...