Inflation of people over 50 exceeds IPCA in the last 12 months

Inflation for families headed by people aged 50 or over has surpassed that seen for Brazilians in general in the last 12 months, according to a new price index that measures the cost of living for this public.

The IPCA 50+ or ​​”inflation of the oldest old” was created by economist Arnaldo Lima, director of the MAG Longevity Institute, former secretary of the Ministry of Finance and former director of Funpresp (pension fund for federal employees).

The index considers the same variation of the items that make up the IPCA (Extended Consumer Price Index), calculated by the IBGE and which serves as an inflation target. However, the weight of each product and service is weighted based on the consumption basket of the families headed by these people.

In the accumulated 12 months through October, the inflation of the oldest old was 7.2%, higher than the IPCA of 6.5% in the same period.

Families whose head is 50 years of age or older have consumption more concentrated, relatively, in the groups health, transport, communication and household items. As a result, they spend relatively less on housing, education, food and personal expenses.

The inflation of the oldest old was below the general average of January 2020, when the IPCA series started to be released with the weights of the new POF (Family Budget Survey) of the IBGE, until April of this year. Since May, the accumulated index in 12 months has surpassed the general index.

One of the explanations for this is that the fuel tax exemption that took place from that month onwards had a greater impact on the general index than on the IPCA 50+, due to the difference in weight of this item in the consumption baskets of these families.

Arnaldo Lima says that the new indicator is yet another tool to assess the financial and equity situation of this public. While the Brazilian population under 50 has increased by just 1% over the past ten years, the portion aged 50 or over has grown by 35%.

“These families have different consumption habits, making the impact of inflation on their expenses also different from other age groups”, says the executive.

He says that this public is more active in the job market today than in previous decades and that their families are very financially dependent on these heads of families, demanding more savings for the future and the use of a more adherent inflation index for the purposes of pension planning.

“In terms of life expectancy, today’s 50-year-olds are the 40-year-olds of yesterday, but with less benevolent social security rules. That is, we will have an increasingly long-lived population, which will require more resources available to face growing expenses, especially in health.”

Other institutions also have specific indexes for older audiences, but with different scope and methodology.

The IPC-3i, from FGV (Fundação Getulio Vargas), is based on price indices from the institution itself and considers families with at least half of the components aged 60 or over. Fipe makes calculations for the municipality of São Paulo also focused on the population in this age group.