The rate of inflation faced by elderly consumers in the UK is much higher than the headline inflation rate indicated by the consumer prices index (CPI), it has been suggested.

New research from the Alliance Trust Research Centre shows that inflation rates faced by the over-75s stands at 4.0 per cent, significantly higher than that for other age groups.

Headline inflation, meanwhile, stands at 2.8 per cent at present.

That said, the centre also notes that the elderly rate has declined from last month when it was pegged at 4.7 per cent.

The firm asserts that food price inflation hits elderly households particularly hard given the fact that food and beverages typically represent 17 per cent of their budgets.

Shona Dobbie, head of the Alliance Trust Research Centre, said: "Any household which spends a large proportion of its budget on basic goods and services is currently facing a higher rate of inflation than the headline CPI suggests.

"Although we have now had delivery of some promised cuts in gas and electricity prices, gas price inflation is still running at 22 per cent and electricity price inflation at 16 per cent, adding to the financial burden of running a home."

In response, Alliance Trust has repeated its calls for pensions to be linked to the increase in the cost of retired living.

A separate ten-year study by the firm, published in April, suggested that many "spend-happy" families needed to urgently reassess their financial habits to avoid unmanageable debt.