Young People Witness Rise In Inflation

Britons, particularly the young, are seeing a rise in the financial pressures placed upon them, a new study indicates.

In research carried out by the Alliance Trust Research Centre, the under-30s and those aged between 30 and 49 are shown to have seen the highest rises in inflation costs over the course of last month. On the other hand, the over-75s have witnessed a fall in prices, due to decreasing costs of electricity and gas. However, such consumers still face the highest rate of inflation in the country at 2.1 per cent - some 17 per cent above the government’s headline rate.

And with the under-30s now also being privy to the highest rate of inflation seen in the country, these people could well begin to struggle the most in paying off loans and credit cards, in addition to servicing other demands on their finances. The news comes despite the research institution revealing that the official headline rate of inflation fell by 0.1 percentage points over the course of August to 1.9 per cent.

Commenting on the figures, Shona Dobbie, head of the Alliance Trust Research Centre, said: “Even though monthly inflation has fallen, our four-year study continues to highlight the extent to which the UK’s elderly are one of the groups hit hardest by current high levels of inflation. Despite a drop in headline inflation to just 1.8 per cent this month, the elderly still face a higher rate of inflation of 2.1 per cent.

“It is worrying too to see that young adults are now also facing inflation at above the headline rate because of higher rents and education costs, as well as the costs of basic goods. We have to remember, though, that the plight is worse for the elderly since more than four years of higher-than-average inflation has eaten into pensioners’ budgets and left them struggling to pay higher bills.”

Overall, gas prices were shown to have decreased by one per cent last month - the first decrease noted since 2001 and a move which was particularly suggested to have helped older people. Meanwhile, electricity inflation is below three per cent. However, the Alliance Trust Research Centre stated that Britons could be set for an increase in difficulties meeting day-to-day expenses as the effects of recent low food prices could be “short-lived”. Ms Dobbie reported that as inflation over the cost of food grew over the course of last month, with prices being driven by the ten per cent hike in the value of vegetables, consumers could find more of their monthly money is going towards such essentials, which in turn may impact upon their ability to make debt repayments on loans, credit cards and overdrafts.

The predicted rise was partially attributed to the recent wave of flooding seen in Britain and a heat-wave in mainland Europe. “This would have the biggest impact on the inflation rate facing the over-75s, who spend a much higher proportion of their household budgets on these items,” she stated.

Meanwhile, consumers have been advised to make sure that they leave their finances in sufficient shape to allow them to handle any unexpected demands put on their spending. Figures released by Birmingham Midshires earlier this year showed that although more people are saving money, less cash is actually being set aside. And with general living costs reported to be rising the financial services provider stated that Britons should prepare their finances to allow them to cope with unexpected loan payment demands or utility bills.

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