Estimated Inflation by Household Characteristics

The following tables show estimated inflation from September 2017 to September 2022, and from September 2021 to September 2022, 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 a higher estimated inflation than the CPI. 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 year was 9.0%, compared to 7.5% for the highest income decile. See Table 3.1.

Over the five-year period from September 2017 to September 2022, Rent and Electricity, Gas & Other Fuels have together been the biggest contributors to inflation for households with lower gross household income. Restaurants & Hotels and Transport have been the biggest contributor to inflation in the last five years for households with higher gross household income. 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 Transport, and for Restaurants & Hotels, has the effect of reducing this estimated inflation gap. See Table 3.2.

In the 12 months to September 2022, Electricity, Gas & Other Fuels was the biggest estimated contributor to inflation for households with lower gross household income. Transport, Electricity, Gas & Other Fuels and Restaurants & Hotels were the biggest contributors to inflation in the last year for households with higher gross household income. High inflation for Electricity, Gas & Other Fuels has the effect of increasing the gap in estimated inflation between households with lower and higher incomes. High inflation for Transport, and for Restaurants & Hotels has the effect of decreasing this gap. See Table 3.3.

Household Tenure

Households that rent their accommodation had higher estimated inflation than households that own their home over the last five years. Inflation for households with a mortgage has been lower than for households that own their home outright. See Table 3.4.

For households renting their home, Rent has been the biggest contributor to estimated inflation over the five years since September 2017. The method used in this report estimates that rent contributed almost half (7.3 percentage points) of the total estimated five-year inflation (15.1%) 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 3.5.

In the 12 months to September 2022, Electricity, Gas & Other Fuels was the biggest estimated contributor to inflation for households that own their home (outright or with a mortgage) and for those who rent from a local authority. For households that rent privately, the Rent subindex was the largest contributor to their estimated annual inflation (see also note on Rent in preceding paragraph). See Table 3.6.

Household Location (Urban/Rural)

There was no difference (0.0 percentage points) between estimated inflation for Urban and Rural households in the five years since September 2017. In the year to September 2022, Urban households had estimated annual inflation 0.1 percentage points below the CPI and estimated inflation for Rural households was 0.5 percentage points higher than the CPI. See Table 3.7.

In the five years to September 2022, the main differences in the factors contributing to urban and rural inflation were Rent (2.4 percentage points contribution to urban inflation, only 0.4 percentage points to rural inflation), and Transport (2.3 percentage points contribution to urban inflation, 4.1 percentage points contribution to rural inflation). See Table 3.8.

In the 12 months to September 2022, Electricity, Gas & Other Fuels and Transport were the biggest contributors to estimated inflation for both urban and rural households. Rural households’ higher estimated inflation in the last year is due largely to Transport being a higher proportion of their total expenditure than it is for urban households. See Table 3.9.

Age of Household Reference Person

The household reference person in the 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 2017, the estimated inflation experienced by households with reference person aged 65 or over was 0.5 percentage points higher than the overall CPI; in the 12 months to September 2022, these households also had higher estimated inflation (+0.8 percentage points) than the CPI. Households with the household reference person aged under 35 had higher estimated inflation than the CPI across the five-year period (+1.1 percentage points) but had lower estimated inflation (-0.2 percentage points) than the CPI in the past year. See Table 3.10.

Over the five-year period since September 2017, Rent was the biggest contributor (5.3 percentage points) to estimated inflation for households where the reference person is aged under 35. This contrasts with the contribution of Rent to total estimated price change for households with reference person aged 35 to 64 (1.3 percentage points) or reference person aged 65 or over (0.5 percentage points). See Table 3.11.

In the 12 months to September 2022, households with the reference person aged 65 or over had higher estimated inflation than other age groups, due to Electricity, Gas & Other Fuels being a higher proportion of their total expenditure than it is for other age groups. Rent was the biggest contributor to inflation in the last 12 months for households where the household reference person was aged under 35. Electricity, Gas & Other Fuels was the biggest contributor to estimated inflation for households where the reference person was aged 35 to 64. See Table 3.12.

Household Composition

Households of one adult with children had the highest estimated inflation in the five years since September 2017, but households of one adult without children had the highest estimated inflation in the last year. Households containing two adults with more than three children, or households containing three or more adults with children (Other households with children), had the lowest estimated inflation between September 2017 and September 2022 while Households with three or more adults (without children) had the lowest estimated inflation in the last 12 months. See Table 3.13.

Over the five years since September 2017, Rent was the biggest contributor (5.8 percentage points) to estimated inflation for households of one adult with children. For households containing three or more adults, Restaurants & Hotels was the largest contributor to five-year inflation (3.0 percentage points) while Transport and Electricity, Gas & Other Fuels were the joint largest contributors for households with two adults and three or less children. Electricity, Gas & Other Fuels was the biggest contributor for all other household compositions. See Table 3.14.

Between September 2021 and September 2022, households of one adult had the highest estimated inflation (9.2%) because of the high contribution of Electricity, Gas & Other Fuels. Households of one adult with children had the next highest estimated inflation (9.1%), reflecting the high contribution of Electricity, Gas & Other Fuels and Rent. Households of two adults also had higher than average estimated inflation (8.4%), reflecting the high contribution of Electricity, Gas & Other Fuels and Transport. See Table 3.15.