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Two most vulnerable groups hit worst by inflation, says Alliance Trust

The over 75s and poor families are hit hardest by inflation, according to a new study by Alliance Trust.

Even though headline inflation has dipped, latest show that the over-75s are still the age group being hardest hit by inflation.

The elderly faced an annual inflation rate in January of 4.2 per cent, which is more than double the governments inflation target, according to Alliance Trust Research Centres monthly alert.

Inflation for the over 75s is now running at 4.2 per cent – 56 per cent higher than headline inflation of 2.7 per cent while lowest income households face inflation of 3.9 per cent – 44 per cent higher than the headline rate.

Alliance Trust maintains says that pensions should be linked to the rise in costs of living for the retired people.

Head of the Alliance Trust Research Centre Shona Dobbie says: Low income and elderly households are forced to allocate their budgets to the goods and services which have experienced the highest price changes, with little disposable income left over to spend on discretionary goods, such as clothing, footwear and audio visual products, where prices continue to fall.

This months results continue to illustrate that the official headline inflation rate does not necessarily reflect the actual impact of price increases experienced by many households in the UK. Our study shows that both the over-75s and the lowest income households have had to cope with a rate of inflation in excess of 3 per cent since May of last year.

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