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Inflation leaves over-55s £600 a year worse off

Published on 11 November 2010 12:00 AM

Inflation leaves over 55s on average £600 a year worse off

Age UK Enterprises Silver RPI reveals true impact of price rises on those in later life

The cost of inflation on those in later life has been far greater than estimated by official measures according to the Silver RPI launched today by Age UK Enterprises*, the commercial services arm of charity Age UK, to coincide with the Bank of England Quarterly Inflation Report.

The Silver RPI shows that since the beginning of 2008, those aged over 55 have experienced price rises at almost two per cent above that suggested by headline RPI figures. This rises to four per cent above headline RPI for those over 75. The gap between real and headline inflation over that period has cost the average 60 year old £620 a year, rising to over £700 for someone aged between 65 and 69.

Cost of the gap between real and headline inflation by age band

Age band

Percentage difference between real and headline RPI

Ave cost/year**
















The Silver RPI has been developed by Age UK Enterprises in partnership with former Bank of England inflation specialists, Fathom Consulting, to become the most complete measure of cost increases in later life. It uses information from the Living Costs and Food Survey (LCF) to re-weight the 78 items that make up the official RPI to better reflect the expenditure patterns of over 55s. The measure is the first to consider inflation at five year age bands above 55 years of age and unlike existing ONS pensioner measures*** includes all housing costs and households at all income bands.

The Silver RPI shows that in the last two years the gap between inflation costs for those in later life and the general population has widened significantly with over 55s experiencing a higher rate of inflation than the general population. A primary reason for this has been the fall in mortgage interest rates which has had less effect on those in later life who are less likely to carry mortgage debt. This means that overall costs for those in later life have not reduced as greatly as for the population as a whole and, in addition, they have faced cost increases on items where they spend proportionally more such as utilities.

Commenting on the findings, Gordon Morris, Managing Director, Age UK Enterprises said: "In the aftermath of a global recession many households are struggling with their finances but, as revealed by the Silver RPI, those in later life are disproportionately affected, particularly in recent times. The impact of inflation on over 55s has been substantially underestimated and it worsens as you age, with over 75s experiencing cost rises on average four per cent above official measures. For a typical over 60 year old, it means they are on average more than £620 a year worse off than previously thought."

He continued: "The Silver RPI suggests that for too long official measures have misrepresented how finances look for those in later life by considering over 55s as one single group who experience money (and inflation) in the same way. We need greater recognition of the reality of money for those in later life. It is time the financial services industry moved from its ‘one size fits all' approach to develop, as we do, products and services tailored for this increasingly important section of the population."

Erik Britton from Fathom Consulting said: "The Silver RPI provides a long overdue measure of the impact of inflation on those aged over 55 and will help older consumers plan their financial futures more accurately. When people plan for retirement, they need to form a view on how much money they will need to get by from one year to the next. In order to do this accurately, it is important that they have access to reliable information on changes to the cost of living for people in their own age group, rather than the population as a whole."

The Silver RPI is published in full on Thursday 11 November and available as a PDF report to download.

Download the Silver RPI White Paper (PDF 524 KB)opens link in new window



For more information, to speak to a spokesperson or to receive the full report ‘The Silver RPI' contact Jo Roberts or Andy Martinus on 020 7360 7878 or

* Age UK Enterprises is the trading name of Age Concern Enterprises Limited

**The additional costs faced by older consumers is calculated by multiplying the difference in percentage change in prices faced by each age band and that faced by the population as a whole since January 2008. This is then multiplied by the average weekly expenditure for that age band and finally multiplied by the number of weeks in a year (52) to establish the annual cost of this extra inflation.

*** The ONS one and two-person pensioner indices consider only households where the head of the household is a male aged over 65 or a female aged over 60 where at least 75% of income is derived from state benefits. They exclude all housing costs.


About Erik Britton, Director at Fathom Consulting:
Erik Britton joined Fathom as a director in October 2007. He has 18 years of experience as a professional economist and was formerly a director at Oxford Economics. Prior to Oxford Economics, Erik was involved in economic modelling and forecasting, first at a London-based consultancy called MMD, and then at the Bank of England. At the Bank of England, Erik spent five years in the Monetary Analysis Division where he ran the Bank's UK macroeconomic model, co-ordinated its international forecast, and also managed a team of economists responsible for analysing the economics of the corporate sector.

About Fathom Consulting:
Fathom Consulting is an independent consultancy which combines macroeconomic analysis together with financial market research. Fathom's team of economists combine a high degree of technical expertise with many years of practical experience in policy‐making and financial institutions. Their combined experience of analysing both the global economy, the UK and the Bank of England in particular, is unrivalled by any other private sector institution in the UK.

Age UK is the new force combining Age Concern and Help the Aged. The Age UK family includes Age Scotland, Age Cymru, Age NI and Age Concern Enterprises - the trading arm of Age UK. Age UK, a charitable company limited by guarantee and registered in England: registered office address 207-221 Pentonville Road, London N1 9UZ, company number 6825798, registered charity number 1128267.

To fund its charitable activities, Age UK needs a constant flow of independent income. It seeks to achieve this through a balance of traditional fund raising and trading activities.

The trading activities, through Age Concern Enterprises, (ACEnt) enable it to meet the needs of older people, through products specifically designed to meet these needs; quality products such as general insurance and energy Services.

ACEnt incorporates: Age UK Energy, Age Concern Insurance Services and Age UK Guaranteed Funeral Plans. Log on to for details.

Age Concern Enterprises is part of the Social Enterprise Coalition; an organisation that represents a wide range of social enterprises with the overarching aim of working in partnership for the creation of effective sector products, services and knowledge-sharing networks to help stimulate and encourage growth, development and sustainability of social enterprises in England.

Age Concern Enterprises Limited is authorised and regulated by the Financial Services Authority for insurance mediation (311438). Age Concern Enterprises Limited is registered in England and Wales No. 3156159, registered office: Astral House, 1268 London Road, London SW16 4ER. VAT Number: 710 3843 66. Age Concern Enterprises Limited is a wholly owned subsidiary of Age UK (registered charity No. 1128267 and registered company No. 06825798) and donates its net profits to Age UK.

Age Concern England (charity number 261794) has merged with Help the Aged (charity number 272786) to form Age UK, a charitable company limited by guarantee and registered in England: registered office address 207-221 Pentonville Road, London, N1 9UZ, company number 6825798, registered charity number 1128267.

Age Concern Enterprises is based at 4th floor, 207 - 221, Pentonville Road, London, N1 9UZ.

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Last updated: Oct 06 2017

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