Why Inflation Is Hitting Baby Boomers Hardest
UK inflation, currently at 5 percent, is hitting those aged between 45 and 65 known as the baby boomer generation hardest, a new report has found.
If the current level of inflation persists, in 2024 that generation will find that 100 pounds ($156) will lose half its value and will only purchase £49.86 worth of goods and services, M&G Investments economist Anthony Doyle said in a report .
To analyze what the average UK citizen experienced in terms of inflation, Doyle split the population into four categories: student, parent of a young family, baby boomer, and pensioner.
“The basket of goods will differ between a student or a pensioner and hence their respective experience of inflation can be very different,” he said in his report.
His brother’s girlfriend, a university student, his uncle (parent of a young family), his father (baby boomer born in 1956), and his 78-year old grandmother served as examples.
Doyle looked at what the inflation rate was over the past year for the categories that made up the UK’s basket of goods, ranging from food and alcohol to transport and education and calculated inflation across the categories on the basis of what goods the average “category” might consume.
The overall weight given to transport, which saw the highest rate of inflation, was highest for baby boomers. Baby boomers were also more exposed to sharp increases in other categories, such as housing and restaurant bills.
“Inflation for a student came out at 5.4 percent. Inflation for a parent of a young family is 5.3 percent. The baby boomer category came out at 5.5 percent. Pensioner inflation was calculated to be 4.8 percent,” Doyle said in his report.
“From this analysis it appears baby boomers are being hit the hardest by inflation,” he said.