OREANDA-NEWS. August 17, 2016. Inflation (Consumer Price Index) was today announced to be running at 0.6%, in the year to July 20161. This is the highest it has been since November 2014. For 31 month’s this headline inflation figure has been below the government’s target of 2%. It last breached this figure in December 2013.                                         

Still too soon to judge Brexit impact

This is the first official inflation data to have been collected since the EU referendum in June. It is premature to reach any conclusions about the impact of the result on prices. However, it is noted that price of alcohol rose by 0.5% between June and July 2016 compared to a fall of 2.5% between the same two months last year. This was primarily due to a rise in the price of wine which will have been impacted by the recent fall in the price of sterling. 

The hidden different experience by age

The headline figure of 0.6% is an average, but shopping habits differ by age. Aviva’s analysis of typical shopping habits of different age groups2 and the price movements of different services and goods3 unveils a very different experience for different age groups.

Aviva’s analysis shows that the under 30s are experiencing above average price inflation –nearly three times the level experienced by those aged 75+.

In areas where the young spend more of their money – e.g. education and hotels – prices are rising. In areas where the young spend less of their money – e.g. food and non-alcoholic drinks – prices are falling.

Higher inflation across all age groups

Analysis from Aviva show that today’s age-based inflation figures are at their highest level for over a year, across all age groups. 

The last time under-30s experienced the current level of age-based inflation (0.90%) was in February 2015. The last time all other ages experienced current levels of age-based inflation (0.35% to 0.61%) was in November 2014.

Aviva comment

Commenting on the analysis, Alistair McQueen Savings & Retirement manager said: “Across all ages, inflation has not been at current levels for over a year. The under-30s, in particular, are facing a double-whammy. Prices are rising faster in areas where they spend more, and rising slower, or falling, in areas where they spend less. These underlying differences are often hidden when we plan our finances. 

“Price movements are outside anyone’s direct control, but this does not mean we are powerless to act. There are two actions we can take to manage the impact of inflation. Firstly, careful and constant budgeting helps us manage the impacts of price movements. A simple understanding of money coming in and money going out will help defend us against “hidden” price movements.

“Secondly, making any savings work harder to counter the effects of inflation makes good financial sense. An individual savings account (ISA) and a pension, with their positive tax advantages, would be a good place for many savers to begin.”

Aviva services

Aviva hosts a free online budget planner on its website to help all ages understand their money coming in and money going out - https://www.direct.aviva.co.uk/myfuture/BudgetPlanner

Aviva also offers all ages direct access to ISAs and pensions on its website - http://www.aviva.co.uk/retirement/saving-for-future/

- Ends -

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

Aviva Press Office: Fiona Whytock: 07800 692 299 or fiona.whytock@aviva.co.uk

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.  
  • Aviva’s asset management business, Aviva Investors, provides asset management services to both Aviva and external clients, and currently manages over ?289 billion in assets.
  • 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.
  • By serving our customers well, we are building a business which is strong and sustainable, which our people are proud to work for, and which makes a positive contribution to society.
  • The Aviva media centre at http://www.aviva.com/media/ includes company information, images, and a news release archive.
  • For an introduction to what we do and how we do it, please click here http://www.aviva.com/about-us/aviva/
  • For broadcast-standard video, please visit http://www.aviva.com/media/b-roll-library/
  • Follow us on twitter: www.twitter.com/avivaplc/
  • Follow us on LinkedIn: www.linkedin.com/company/aviva-plc
  • For the latest corporate films from around our business, subscribe to our YouTube channel: www.youtube.com/user/aviva
  • We have a Globelynx system for broadcast interviews. Please contact the Press Officer noted above if you would like to make a booking

1Source: ONS CPI data, 16 August

2Source: Office for National Statistics, Annual Family Spending data, 2001 to date

3Source: Office for National Statistics, Monthly Consumer Price Inflation data, January 2001 to date