Inflation for wealthy hitting 9.5%
Brewster's Millions: Inflation hitting the rich hardest
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Thursday, 14, Feb 2008 10:45
The cost of living for Britain's wealthiest people is rising over four times the rate of the general public.
The Coutts Wealth Inflation Index shows the cost of living for the UK's richest rose 9.5 per cent last year - compared with consumer prices index (CPI) increase of 2.1 per cent.
The Coutts research - based on the spending habits of its World Card - shows the growth in prices for luxury goods and services often excluded from standard inflation.
Currently there are around 112,400 people in the UK with onshore liquid assets of over £1 million - a figure expected to rise 13 per cent by 2011.
The biggest inflationary pressures for high net worth individuals came from jewellery (up 25 per cent), followed by club fees (up 17 per cent), school fees (up seven per cent), and luxury cars (up three per cent).
The Coutts research also revealed the wealthy are more likely to be enjoying their cash with 220 per cent more than average spent on recreation and 308 per cent more on restaurants.
Stephen Blackman, senior economic advisor at RBS Group Economics, said: "We often hear about large rises in wealthy households' incomes, but less is known about the expenditure side of the equation.
"The prices of luxury goods and services are rising at such a rapid rate that nominal increases in income may overstate the increase in their real purchasing power."
| | Average annual spend per person | High net worth annual spend per person |
| Transport | £3,224 | £6,389 |
| Recreation and Miscellaneous | £3,843 | £12,305 |
| Housing, fuel and power | £2,475 | £1,419 |
| Food and drink combined | £3,016 | £3,786 |
| Restaurants | £1,971 | £8,045 |
| Household goods and services | £1,576 | £8,047 |
| Clothing and footwear | £1,206 | £4,259 |
| Communications | £608 | £236 |
| Education | £374 | £1,893 |
| Health | £306 | £1,420 |