interactive investor comments on ONS Household Inflation estimates.
The Office for National Statistics (ONS) has today released estimates of inflation rates for different types of households in the UK.
- High-income households experienced a higher rate of inflation than low-income households for most of 2021
- However, they saw similar rates of inflation for Quarter 4 (Oct to Dec) 2021
- Households with children experienced higher rates of inflation in Q4 last year than households without children.
Commenting, Myron Jobson, Senor Personal Finance Analyst, interactive investor, says: “The fastest rate of inflation in generations is hurting consumers across the nation who are witnessing ever higher prices for seemingly everything, from the food they put on their tables, to energy and petrol.
“Inflation affects different households in different ways – often, buffeting those with the least the most. Higher-income households have experienced a higher rate of inflation than lower-income households on average, which the ONS attributes to a higher spend on transport costs, which accounts for a larger proportion of spending compared with low-income households. For low-income households, housing-related costs are more of a factor.
“The ONS figures also suggest that the inflation pinch is more acute for parents. Households with and without children experienced a similar rate of inflation for most of 2021, but the gap widened, with the latter group experiencing higher levels of inflation in the last quarter of the year. This followed the increase in the energy price cap in October 2021, which made energy bills more expensive.
“The harsh reality is that the poorest families are having to shift their spending to stay financially afloat amid rising prices. The rising cost of childcare, through to nappies and snacks will have forced many to make sacrifices to stay on budget.
“The hardest-pressed households face a fresh squeeze on their living standards in the coming months with inflation set to soar even further. We all have a personal inflation number that is unique to us and could be far higher than the catch-all headline figure. Higher inflation is set to be the status quo for some time, as such, it is important to regularly review your spending habits to ensure that you are living within your means and plan ahead to avoid money worries in future.”
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