Personal Finance

Wednesday 20 August 2014

Over 50s are hit hardest by rises in cost of living

Survey reveals who gets it in the neck

Nick Webb

Published 18/11/2012 | 05:00

  • Share

Rises in the cost of living have slowed – but not for everyone.

  • Share
  • Go To

Pensioners and the over 50s are being clobbered while people on benefits and young families are escaping much of the pain of higher prices. The Sunday Independent/KBC Bank reveals whose living standards are hit hardest and who's dodging the bullet.

The over 50s

Cost of living up 3.3 per cent in a year

National average up 1.2 per cent

The over 50s have escaped many of the most severe aspects of the crisis with job losses and negative equity more concentrated among the 20-30 age group. However, living standards have been hit and for many, pensions have also declined sharply.

Our cost of living survey highlights how this section of society is being pummelled. They are not enjoying the benefits of cheaper mortgages. Instead they are being hammered by the massive rises in insurance – health up 15.9 per cent, car up 4.8 per cent. Energy costs are spiralling, up 9.1 per cent. Driving is dearer too, with fuel costs rocketing.

College-age children are a major burden with third-level costs up 6.6 per cent and rents rising 1.5 per cent. Even going out to a restaurant is more costly, rising 1 per cent on last year. Staying in isn't much better, as Downton Abbey is dearer – digital TV is up 3.6 per cent. Pets are also 4 per cent more expensive

Pensioners

Cost of living up 2.7 per cent in a year

National average up 1.2 per cent

Having suffered less than most in the early years of the downturn, pensioners are now feeling the pain. Since October 2011, the cost of living for pensioners has risen at more than double the national average.

Retired citizens have been clobbered by more expensive food bills over the last year, with potatoes up 18.8 per cent, tinned fruit rising 13.4 per cent and flour up 6.2 per cent. Although chocolate prices pogoed last month, they are down 0.5 per cent on the year.

Pipe tobacco prices have leapt 7.9 per cent in the year, however a bed time snifter is marginally less pricey. Gardening costs and plants are 6.8 per cent cheaper.

Pensioners are less likely to have big mortgages and have missed out on savings from falls in interest rates. They are also being savaged by the jump in health insurance – up 15.9 per cent and the price of heating and lighting. Home heating oil is up 13.4 per cent in the last year.

Renters

Cost of living up 0.7 per cent in a year

National average up 1.2 per cent

People living in rented accommodation have missed out on much of the relief caused by the drop in mortgage costs, particularly tracker mortgages, over the last year. Rents have risen 1 per cent over the last year. Rising electricity, gas and other fuel costs have hurt.

Although food prices have risen, the cost of off-licence beer and spirits has fallen by up to 3.2 per cent. Footwear and shoe prices are more than 3 per cent cheaper.

Heading off to see the latest James Bond movie Skyfall will cost a little bit more, with cinema prices up 1.5 per cent but reviewing it on Twitter is cheaper as smartphone tariffs and other communication costs are 3.6 per cent less.

Benefits recipients

Cost of living up 0.6 per cent in a year

National average up 1.2 per cent

Any cuts on benefits will hurt but not as badly as they might, as the cost of living for most people on welfare has risen at just half the rate of the national average. It has increased though, up 0.6 per cent in a year.

While food and drink prices rose by 1 per cent over the last 12 months, certain categories experienced heavy price hikes. Cornflakes and breakfast cereals are 4.7 per cent dearer, with sausages, rashers and other pork products up 6.4 per cent. Baked beans and other processed vegetables are 2.2 per cent more expensive.

Public transport costs have zoomed ahead by 0.6 per cent. Bicycles are 3.6 per cent cheaper. Lighting and heating bills are dearer. Clothing prices are up 1 per cent while jewellery, clocks and watches are 2.7 per cent cheaper.

Local authority rents are down 1.6 per cent.

Stay-at-homers

Cost of living down 0.1 per cent

National average up 1.2 per cent

Children who stay living with their parents long into their 20s and 30s are on the pig's back, as their cost of living fell over the last year.

Without exposure to mortgage or rents, these people have much higher levels of disposable income. Heading out to Krystal or nightclubs is generally cheaper with prices falling 4.8 per cent. But going down the pub is dearer, with beer prices up 1.7 per cent in licensed premises. Restaurant prices are up 1 per cent with weekends away also dearer as hotel costs have risen 1.1 per cent over the last year.

Digital music players, smartphones and touch-screen tablets are exceptional value, with prices falling 9.5 per cent.

Looking trim is cheaper too, with gym costs and sports participation fees tumbling by 5 per cent. Sports equipment is also down 1.8 per cent. Books are better value, although the latest glossy celeb magazine is 1.5 per cent dearer – which means you'll miss the debate over whether or not Twilight star Kristen Stewart was wearing pants.

The middle classes

Cost of living down 1.6 per cent

National average up 1.2 per cent

Tax hikes, pension relief cuts and a bucketload of stealth taxes are going to make the leafy suburbs look like the aftermath of a slasher movie.

But the former "Tiger cubs" are doing quite well this year, with their average cost of living falling by 1.6 per cent against the national average rising 1.2 per cent. The 18.1 per cent fall in mortgage interest costs has had the biggest impact, magnified by the fact that many of these people have large tracker mortgages.

Education is a much larger bill, with third-level costs up 6.5 per cent and the posh private school up 2.5 per cent. Private healthcare is up 15.9 per cent and insuring the Beemer is 4.8 per cent dearer.

Getting a spot of botox is dearer with outpatient costs up 0.2 per cent. However, cosmetics and skincare prices are down 4.4 per cent. Hairdressing bills rose sharply last month but are only up 0.1 per cent in the year.

Filling the house with the latest gadgets is better value, with computers and laptops now 14.2 per cent cheaper and televisions down 8.4 per cent. However, filling up the Land Rover Vogue costs a staggering 11.5 per cent more. At least, hiding assets abroad is more affordable. Air fares have fallen 1.6 per cent.

Young families

Cost of living down 2.2 per cent

National average up 1.2 per cent

Young couples with kids appear to be doing rather well, with their cost of living dropping over the last year. The bulk of this fall is due to an 18.1 per cent drop in mortgage interest costs. A new people carrier or other type of car is down 1.1 per cent but fuel prices are up over 11 per cent.

While mortgage bills may have been reduced, food prices have risen by 1 per cent, with some kids' foods rising spectacularly. Orange juice is up by 6.3 per cent and fizzy drinks by almost 4 per cent. Jam has risen by 1.6 per cent and crisps by 2.4 per cent. But pizza is 4.8 per cent cheaper.

Shoes, hoodies and PJs are around 1 per cent dearer. Washing machines and dishwashers are more affordable though, dropping by 1.7 per cent.

But looking after the kids is not so onerous. Pre-school costs have risen 0.2 per cent and childcare bills are flat. Dental fees have fallen 0.1 per cent, with doctors' fees down 0.3 per cent. With Christmas approaching, getting the latest toys or games is 5.1 per cent cheaper than last year.

First-Time Buyers

Cost of living down 5.4 per cent

National average up 1.2 per cent

The big picture for first-time buyers sucks. Negative equity is a crippling problem and house prices have fallen close to 60 per cent in five years. But there is a bit of good news.

The cost of living for first-time buyers has tumbled this year. Around 60 per cent of all mortgage stock are trackers, with far higher levels for more recent loans. Mortgage interest costs have dropped 18.1 per cent in the last year. Home insurance bills are down by 4.9 per cent and maintenance costs are 0.8 per cent down.

TVs and multimedia equipment is 8.4 per cent cheaper, with furniture falling by 6.3 per cent. Glassware, tableware and other knicknacks are also better value with gardening equipment down 3.3 per cent.

Sunday Indo Business

Read More

Editors Choice

Also in Business