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Younger and richer people `benefiting more from mortgage reductions`
11/03/2009
Younger and richer consumers in the UK have tended to benefit more from mortgage rate reductions than their older and poorer counterparts, it has been suggested.
According to the Institute for Fiscal Studies (IFS), richer households have gained the most from such cuts and from falling motor fuel bills.
It added that these households - particularly those with mortgages - now have low inflation rates.
As a result of falls in the UK`s base rate of interest, mortgage inflation fell from -2.9 per cent in September last year to -34.7 per cent in January 2009, IFS said.
In contrast, older and poorer households have suffered the most from continued high inflation in food and domestic energy costs, it claimed.
Such people tend to spend a greater proportion of their income of such costs, IFS pointed out.
Established around four decades ago, IFS is an independent microeconomic research institute which focuses on a range of areas, including public finances, tax and welfare policy.
