Benefit recipients least bothered by inflation

22/03/2011 15:00

Over the past four years, the inflation rate was below average for households relying on benefits, because they have a spending pattern different from other types of households.

Price index by type of household, 2010

Price index by type of household, 2010

Life for average household 6.7 percent more expensive than four years ago

On average, life for all households in the Netherlands became 6.7 percent more expensive over the past four years. For households living on benefits, prices were on average 6.1 percent higher than in 2006. Prices also increased below average for benefit recipients and employees, but for pensioners and self-employed prices rose just above average.

The discrepancy is due to the fact that the various types of households tend to have different spending patterns. Employees constitute the largest category and for them inflation hardly varies from the average rate.

Households relying on benefits profit most from lower energy prices

The average price increase for people living on benefits was 1.1 percent last year. The average inflation rate for all households was 1.3 percent. Price developments for pensioners were also below the average rate.

The main reason is that these households proportionally spend more on gas and electricity than employees and self-employed. As energy prices dropped last year, the downward effect on inflation was stronger for benefit recipients and pensioners. These categories also spent less on motor fuels, which became more expensive.

Share energy and motor fuels in total household expenditure, 2010

Share energy and motor fuels in total household expenditure, 2010

Considerable differences between individual households

Inflation differences between the various types of households are predominantly caused by differences in spending patterns. Spending patterns may also vary widely between individual households within the same category. The personal inflation calculator allows individuals to calculate the effects of inflation on their own situation.

Karlijn Bakker and Cees van der Vlis