Rising inflation has had only a marginally greater impact on the living standards of retired people than on that of other sectors, according to a survey commissioned by the Irish Association of Pension Funds.
Because households classified as retired have different patterns of consumption and tend to have lower than average incomes and because increases in occupational pensions tend to lag inflation, there was concern they were particularly disadvantaged by rising inflation.
However, the survey found that the rate of inflation experienced by retired people is broadly similar to that for other sectors despite their different spending patterns. The Consumer Price Index (CPI) measures the increase in the price of a basket of goods consumed by the average household over time to give the average inflation rate.
But retired households differ from the average with incomes of just two-thirds the national average and an average household size of 2.1 people against 3.3. Therefore, their consumption patterns differ from the average so the rate of inflation they experience differs.
The IAPF report, Inflation: Impact on the Retired, found that retired people spent proportionately more on alcohol, fuel, light, tobacco and food, but less on housing, transport, clothing and footwear.
It is the first survey on the impact of inflation on retired people in the Republic and was carried out by research company Shane F. Whelan and Co.
"One might have thought that retired people would have been particularly hit this year because of the budget increase in cigarettes combined with the overall increase in oil prices," Mr Whelan said.
"They were, but other sections of the community also suffered price rises on those items where they spend comparatively more - transport costs and services generally. The outcome is that inflation experienced by the retired was almost exactly that of the average family over the last 12 months."
For the survey, the researchers devised an inflation index specifically for retired people - the Consumer Price Index for Retired Households (CPI-R).
