Estimated Inflation by Household Characteristics September 2023

The following tables show estimated inflation from September 2018 to September 2023, and from September 2022 to September 2023, by household groups. The household groups analysed include households grouped by equivalised gross household income, by housing tenure, by housing location (urban/rural), by the age of the household reference person, and by the composition of the household. The contributions of various goods and services to the total inflation of each household group are also shown.

Equivalised Gross Household Income Deciles

Households with lower equivalised gross household income have lower estimated inflation than the CPI in the last 12 months while households with higher equivalised gross household income have higher estimated inflation than the CPI. Estimated rates of inflation from September 2022 to September 2023 by income decile ranged from 6.0% for lower deciles (first and third) to 6.9% for the highest decile (10th) (See Table 2.1).

In the five years to September 2023 the opposite relationship was observed where households with lower equivalised gross household income had a higher estimated inflation than the CPI over the last five years while households with higher equivalised gross household income have lower estimated inflation than the CPI. For example, for households in the lowest income decile the estimated inflation in the last five years was 20.0%, compared with 18.7% for the highest income decile. Estimated rates of inflation from September 2018 to September 2023 by income decile ranged from 18.5% for an upper decile (eighth) to 20.5% for one of the lower deciles (second) (See Table 2.1).

Over the five-year period from September 2018 to September 2023, Rent, and Electricity, Gas & Other Fuels have together been the biggest contributors to inflation for households with lower gross household income (first to fourth deciles). Electricity, Gas & Other Fuels, and Restaurants & Hotels have been the biggest contributors to inflation in the last five years for households with higher gross household income (fifth to eighth deciles). Those two contributors along with Transport are the three highest contributors to inflation for the highest income deciles (ninth and tenth). High inflation for Rent and for Electricity, Gas & Other Fuels has the effect of increasing the estimated difference in inflation between households with lower and higher incomes. High inflation for Restaurants & Hotels and for Transport has the effect of reducing this estimated inflation gap (See Table 2.2).

In the 12 months to September 2023, Rent and Electricity,Gas & Other Fuels were the joint largest estimated contributors to inflation for households with lowest gross household income (first decile) followed by Food & Non-Alcoholic Beverages. For other households with lower gross household income (second to fourth deciles) Electricity,Gas & Other Fuels was the largest contributor to estimated inflation in the 12 months to September 2023; this was followed by Food & Non-Alcoholic Beverages for the second and third deciles. Mortgage Interest Payments followed by Restaurants & Hotels were the biggest contributors to inflation in the last year for households with higher gross household income (seventh to tenth deciles). High inflation for Rent, Electricity, Gas & Other Fuels or for Food & Non-Alcoholic Beverages have the effect of decreasing the gap in estimated inflation between households with lower and higher incomes. High inflation for Mortgage Interest Payments, and Restaurants & Hotels has the effect of increasing this gap (See Table 2.3).

Household Tenure

In the last five years, households that own their house with a mortgage (19.9%) or those that rent their accommodation from a local authority (19.8%) had higher estimated inflation than households that own their home outright (18.1%) or those that rent from a private owner (18.8%). Inflation for households with a mortgage has been higher than for households that own their home outright in both the last five years and in the last 12 months. In the 12 months to September 2023, estimated inflation was highest for households that were paying a mortgage (7.8%) and lowest for those renting from a private owner (5.3%) (See Table 2.4).

For households renting their home, Rent has been the biggest contributor to estimated inflation over the five years since September 2018. The method used in this report estimates that rent contributed more than two-fifths (8.1 percentage points) of the total estimated five-year inflation (18.8%) for private renters. The Rent subindex used in this analysis refers to all rents, i.e. not broken down between local authority and private rents. The calculation of the estimated price index for households renting from local authorities and renting from private owners reflects the differences in the share of rent in those households’ spending but does not take into account any difference in the rate of change of rents paid by local authority and private tenants (See Table 2.5).

In the five years to September 2023, Mortgage Interest Payments was the largest contributor to estimated inflation for households that are paying a mortgage (4.9 percentage points of 19.9%) while Electricity, Gas & Other Fuels was the largest contributor to households that own their house outright (4.7 percentage points of 18.1%) (See Table 2.5).

In the 12 months to September 2023, Mortgage Interest Payments was the biggest estimated contributor to inflation for households that own their home with a mortgage (3.4 percentage points of 7.8% estimated inflation). Rent was the largest contributor for those who rent from a local authority (1.3 percentage points of 5.9% estimated inflation) and for households that rent privately (2.1 percentage points of 5.3% estimated inflation) - see note on Rent in preceding paragraph (See Table 2.6).

Household Location (Urban/Rural)

There was no difference between estimated inflation for Urban and Rural households in the five years since September 2018 (both 19.1%). In the year to September 2023, Urban households had estimated annual inflation equivalent just above the CPI at 6.5% while estimated inflation for Rural households was just below the CPI at 6.3% (See Table 2.7).

In the five years to September 2023, the estimated rates of inflation for Urban and Rural households were the same (19.1%) but there are differences in what has been driving those changes. The main differences in the factors contributing to Urban and Rural inflation over that period were Rent (2.7 percentage points contribution to urban inflation, only 0.5 percentage points contribution to Rural inflation), and Transport (2.1 percentage points contribution to Urban inflation, 3.8 percentage points contribution to Rural inflation) (See Table 2.8).

In the 12 months to September 2023, Mortgage Interest Payments was the biggest contributor to estimated inflation for both Urban and Rural households (both 1.4 percentage points) (See Table 2.9).

Age of Household Reference Person

The household reference person in the Household Budget Survey (HBS) is the person in whose name the accommodation was owned or rented. Where the mortgage/rent is jointly paid, the respondent with the highest income is taken as the reference person. In cases where household members receive an equal salary, the eldest member is taken as the reference person.

In the five years since September 2018, the estimated inflation experienced by households with reference person aged 65 or over, at 19.5%, was 0.4 percentage points higher than the overall CPI. In the 12 months to September 2023, households with reference person aged 35 to 64 years had highest estimated inflation (+0.3 percentage points than the CPI). Households with the household reference person aged under 35 had lower estimated inflation than the CPI across the five-year period (-0.3 percentage points) and in the past year (-0.6 percentage points) (See Table 2.10).

Over the five-year period since September 2018, Rent was the biggest contributor to estimated inflation for households where the reference person is aged under 35 (5.9 percentage points of 18.8%). This contrasts with the contribution of Rent to total estimated price change for households with reference person aged 35 to 64 (1.5 percentage points of 19.1%) or households with reference person aged 65 or over (0.6 percentage points of 19.5%) (See Table 2.11).

In the five years to September 2023, Electricity, Gas & Other Fuels was the largest contributor to estimated inflation for households where the reference person was aged 65 years or over (5.6 percentage points of 19.5%). Electricity, Gas & Other Fuels and Restaurants & Hotels were the joint largest contributors to estimated inflation for households where the reference person was aged 35 to 64 years (both 3.7 percentage points of 19.1%) (See Table 2.11).

In the 12 months to September 2023, Mortgage Interest Payments was the largest contributor to estimated inflation for households where the Reference Person was aged 35 to 64 (1.8 percentage points of 6.7%). Rent was the biggest contributor to inflation in the last 12 months for households where the Reference Person was aged under 35 (1.5 percentage points of 5.8% estimated inflation) (See Table 2.12).

Household Composition

Households of one adult (without children) had the highest estimated inflation in the five years since September 2018 (21.1%). Between September 2022 and September 2023, households of one adult (without children) and other households with children (households containing two adults with more than three children, or households containing three or more adults with children) had the joint highest rate of estimated inflation (6.8%). Households with three or more adults (without children) had the lowest estimated inflation in the last five years (17.7%) and in the last 12 months (5.9%) (See Table 2.13).

Over the five years since September 2018, Rent was the biggest contributor (6.4 percentage points of 20.3%) to estimated inflation for households of one adult with children. For households containing three or more adults without children, Restaurants & Hotels was the largest contributor to five-year inflation (4.1 percentage points of 17.7%) while Electricity, Gas & Other Fuels was the biggest contributor to estimated inflation for all other household compositions (See Table 2.14).

In the 12 months to September 2023, Electricity, Gas & Other Fuels was a joint largest contributor to inflation for single person households (1.4 percentage points of 6.8%) while Rent was the largest contributor to estimated inflation for households containing one adult and children (1.7 percentage points of 6.1%). Mortgage Interest Payments was the largest contributor to estimated inflation for households with two adults and one-three children (2.4 percentage points of 6.7%) and other households with children (households containing two adults with more than three children, or households containing three or more adults with children) (1.9 percentage points of 6.8%). Meanwhile Restaurants & Hotels was the largest or joint largest contributor to estimated inflation in the last 12 months for households of two adults without children and households of three or more adults without children (both 1.4 percentage points) (See Table 2.15).