Aviva’s Age Inflation Index: under-30s continue to face the greatest upward pressure on price rises in UK

  • ONS price inflation figures report a 1% annual rise in September 2016
  • Aviva’s analysis reveals that the greatest upward pressure on prices fall on the under-30s
  • More important than ever for savers to shop around for the best deals

LONDON, 24-Oct-2016 — /EuropaWire/ — Today’s official consumer price inflation figures1 reported a 1% rise in the year to September 2016 – the highest rise since November 2014.

Aviva’s analysis shows that the upward pressure on prices is being shared by all age groups, with the under-30s continuing to face the greatest upward pressure on price rises. Beneath the headline figure of 1%, age-based inflation in the year to September 2016 ranged from 0.68% for the over-75s to 1.36% for the under-30s. These are all levels not seen since winter 2014.

Aviva’s Age Inflation Index: September 2016

Under-30 30-49 50-64 65-74 75+
Age-based inflation 1.36% 0.97% 1.03% 0.90% 0.68%

Younger generations in particular are being hit by rising restaurant and hotel prices (+2.9%) and the cost of education (+5.9%). Older consumers continue to benefit, in particular, from falling food prices (-2.3%).

Despite having the lowest age-based inflation rate, the over-75s however are experiencing very significant change. Their age-based inflation rate has doubled over the past month, from 0.34% in August 2016 to 0.68% in September. No-one is immune.

More inflation to come

The ONS has flagged that current business measures are helping to shelter consumers from the recent falls in the price of sterling. These measures are labelled as ‘short-term’. Their ability to protect consumers will also be short-term.

“…whilst the depreciation in sterling is likely to increase the cost of importing goods and outsourcing production, there are reports of businesses having measures in place to protect against exchange rate changes in the short-term.” – ONS

The latest Producer Price Index (PPI) was also published today2 It gives insight into the price pressures being faced by producers. The price of imported materials as a whole (including crude oil) rose by 9.0% in the 12 months to September 2016. 

Commenting on the latest figures, Alistair McQueen, Savings & Retirement Manager at Aviva said:

“Today’s inflation figures support the widespread belief that prices will continue to rise over the months to come.

“If anything, today’s figures continue to shelter consumers from the real price pressures. Many businesses will have implemented measures to help protect against the fall in Sterling, and many businesses will still be resisting the pressure to pass any price rises on to consumers. This resistance, however, comes at a time when import prices are rising by 9%. Resistance can only last so long.

“For savers, the importance of shopping around for the best deal; the importance of maximising tax advantages via products like pensions and ISAs; and the importance of careful monthly budgeting is more important than ever.”

-Ends

If you are a journalist and would like further information, please contact:

Aviva Press Office: Fiona Whytock: 07800 692299 or fiona.whytock@aviva.com

Aviva’s retirement spokesperson, Alistair McQueen, is available for comment/interview

Notes to editors:

  • Aviva provides life insurance, general insurance, health insurance and asset management to 33 million customers, across 16 markets worldwide
  • In the UK we are the leading insurer serving one in every four households and have strong businesses in selected markets in Europe, Asia and Canada. Our shares are listed on the London Stock Exchange and we are a member of the FTSE100 index.
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  • Aviva helps people save for the future and manage the risks of everyday life; we paid out £30.7 billion in benefits and claims in 2015.
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[1] Source: ONS CPI figures, 18 October 2016 –https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/sept2016

[2] Source: ONS PPI figures, 18 October 2016 –http://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/producerpriceinflation/september2016

SOURCE: Aviva plc

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