Estimated Inflation by Household Characteristics

The following tables show estimated inflation from December 2016 to March 2022, and from March 2021 to March 2022, by household groups. The household groups analysed include households grouped by 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, especially in the last year. 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 7.5%, compared to 6.1% for the highest income decile.

Over the 63-month period, Rent and Electricity, Gas & Other Fuels have together been the biggest contributors to inflation for households with lower gross household income. Transport and Restaurants & Hotels have been the biggest contributor to inflation for households with higher gross household income. High inflation for Rent and 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, or for Restaurants and Hotels, has the effect of reducing this estimated inflation gap.

In the 12 months to March 2022, Electricity, Gas & Other Fuels was the biggest estimated contributor to inflation for households with lower gross household income. Transport was the biggest contributor 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 has the effect of decreasing this gap.

Housing Tenure

Households that rent their accommodation had higher estimated inflation than households that own their home. Inflation for households with a mortgage has been lower than for households that own their home outright.

Rent has been the biggest contributor to estimated inflation in the 63 months since December 2016 for households renting their home. For private renters it contributes more than half (6.8%) of their total estimated inflation (12.4%) over that period.

In the 12 months to March 2022, Transport was the biggest estimated contributor to inflation for households that own their home, whether outright or with a mortgage. Electricity, Gas & Other Fuels was the biggest estimated contributor to inflation for households that rent from a local authority. For households that rent privately, the Rents subindex was the largest contributor to their estimated annual inflation.

Household Location (Urban/Rural)

Households in rural areas had lower estimated inflation than the CPI in the 63 months since 2016 but had higher estimated inflation than the CPI in the last 12 months. Households in urban areas had higher estimated inflation than the CPI since 2016 but had lower estimated inflation than the CPI in the last year.

Over the 63-month period, the estimate of inflation has been slightly (+0.2%) above the CPI for urban households, and below (-0.4%) average for rural households. The biggest differences in items contributing are Rent (2.2% contribution to Urban inflation, only 0.4% to rural inflation), and Transport (2.4% contribution to urban inflation, 4.0% contribution to rural inflation).

In the 12 months to March 2022, Electricity, Gas & Other Fuels and Transport have been 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.

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 63 months since December 2016, the estimated inflation experienced by households with reference person aged 65 or over was very close to the overall CPI; in the 12 months to March 2022, these households had slightly higher estimated inflation (+0.5) than the CPI in the last 12 months. Households with the household reference person aged under 35 had higher estimated inflation than the CPI since 2016 (+1.5) but had slightly lower estimated inflation (-0.1) than the CPI since March 2021.

Over the 63-month period, Rent was the biggest contributor (4.9%) to estimated inflation for households with the household reference person aged under 35. This contrasts with the contribution of Rent to total estimated price change for households with reference person aged 35 to 64 (1.2%) or reference person aged 65 or over (0.5%).

In the 12 months to March 2022, households with the reference person aged 65 and 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. Transport was the biggest contributor to estimated inflation for other age groups in the last year.

Household Composition

Households of one adult with children had the highest estimated inflation in the 63 months since December 2016, but households of one adult had the highest estimated inflation in the last year. Households with children and more than one adult had the lowest estimated inflation between December 2016 and March 2022.

Over the 63 months, Rent was the biggest contributor (5.4%) to estimated inflation for households of one adult with children. For one-person households, Electricity, Gas & Other Fuels contributed 3.5%. Transport was the biggest contributor for other household compositions.

Between March 2021 and 2022, households of one person had the highest estimated inflation because of the high contribution of Electricity, Gas & Other Fuels. Households of one adult with children also had higher estimated inflation, reflecting the high contribution of Rent and Electricity, Gas & Other Fuels.