Total inflation for a typical household’s entire basket of goods was 50.7% over the period, while the cost of utilities has risen by 139%. Alcohol and tobacco have also seen significant rises, while soaring house prices have led to a 98% rise in housing costs.

While energy and water prices have shot up over the last two decades, the cost of clothing and shoes has halved, with prices falling by 49%, largely thanks to the rise in products being manufactured more cheaply overseas.

The findings once again call into question the behaviour of the privatised utility companies, already under scrutiny from the government and opposition parties. It has been suggested that competition is working only for those savvy enough to shop around for their rates, leaving those on lower incomes on high standard variable tariffs.

Competition in the utilities sector may weaken following the announcement of a merger between SSE and Npower, knocking the Big Six Energy firms down to five.

Falling prices

Entertainment and recreation costs have fallen by 12%, while the costs associated with telephone and internet have fallen by 4%. The average households have been hit hardest by the inflation of housing costs, the cost of running a car and the cost of insurance, because this is where they spend more of their money.

Andy Cowan, head of financial planning at Tilney, said: “Inflation is often seen as a single figure affecting all households in a uniform way, but price rises and falls have varied dramatically across different goods and services over the last 20 years. This means that individual households can experience inflation very differently, depending on what they spend their money on.

“In the case of the top 10% of UK households – those with an income in excess of £78,500 per year – our research found that they have endured considerably higher overall inflation than the headline figures while also being exposed to a much greater income tax burden than the wider population. These households have needed to see their savings and investments generate a return in excess of 64% over the last two decades, just to stand still in real terms after the impact of inflation.”