Older people see inflation rates increase

Pensioners may struggle financially in the coming months as they are suffering from the highest rates of inflation.

Analysis by the Alliance Trust has found that people in the top two age brackets – 65-year-olds to 74-year-olds and 75-year-olds and over – were the only two to face a rise in inflation in December.

This is despite the fact the measure stayed at 2.7 per cent for the third consecutive month.

Food was found to be the biggest outlay for the two age groups, as they used 14.4 per cent and 16.8 per cent respectively of their budget on this in December.

Shona Dobbie, chief economist at the group, said: "This shows that price movements in just one cost category can have a large impact on the overall rate of inflation which is used in the formulation of monetary policy."

As a result of the situation, older people could find themselves needing debt help in the future if the situation persists, as their household budgets will be squeezed.

By Joe White