Seniors and pensioners suffer the growing impact of inflation

March,22,2022

According to the Australian Bureau of Statistics, Living Cost Index data revealed aged retirees had the highest annual living cost increases throughout 2021.

The Living Cost Index (LCI) shows how price changes affect the living costs of different types of families, including employees, retirees, other government transfer recipients, self-funded retirees, and pensioner and beneficiary households.

 

Schedule your consultation with a Create and Protect Financial Planning expert to help you plan your retirement the way you want.

 

Living costs and fuel prices on the rise

Annual living costs continue to rise across all living indicators, with the Australian Bureau of Statistics (ABS) data revealing a 3.4 % increase for age retiree families - the biggest increase among all demographics in the fourth quarter of 2021. Annual living costs increased by 100 basis points across all five groups, to an average of 3.5 % in September 2021.

According to ABS Head of Prices Statistics Michelle Marquardt, huge increases in motor fuel prices continue to drive up living expenditures. "Automotive fuel prices have risen by 32 % in the last year and remain the major contributor to greater living costs for Australian households," Ms. Marquardt stated. Automotive fuel costs have risen a further 7% since the third quarter of 2021, due to growing global oil prices amid economic recovery and inadequate oil supply.

 

Put the living costs and global increased prices aside because Create and Protect Financial Planning specialists are here to help you plan a pleasurable retirement. Call us to get your personalised scheme.

 

Pensioner household expenditure patterns

The ABS mentions that the impact of price increases on household living costs varies by household group according to differing spending patterns. This is especially true for retirees, as ABS data shows that rising food expenses account for the highest proportion of overall spending for retiree households when compared to other demographics.

"Pensioner households also experienced the highest annual increase for housing costs, with relatively higher expenditure levels on maintenance and repair and property rates; as a result, they also experienced the largest annual increase in living costs, at 3.4 %," Ms. Marquardt said.

 

Australian seniors’ financial security concerns

In light of the ABS statistics issued, it was deduced that financial stability among older Australians remains uneven, and a rising proportion are struggling to fulfill basic financial responsibilities, with many unable to pay for electricity, groceries, and rent on time.

The continued stress that senior pensioners are suffering is apprehensive especially since the pandemic had and still has an influence on older Australians' household income, personal income, hours worked, and hours spent volunteering.

 

Over 22% of elderly Australians are concerned about their financial security for the rest of their lives. Australians need certainty about retirement incomes that cover superannuation, pensions, taxation, concessions and support for participation in the workforce.

Council on the Ageing (COTA) has advocated that the Government take an integrated policy approach to retirement incomes. The proposed 'integrated policy approaches' include all superannuation funds (except SMSFs) and will require having to develop and publish a retirement income strategy for members by July 1, 2022.

 

Looking for certainty regarding your retirement incomes? Contact us to get expert guidance on retirement planning.

 

Disclaimer:The information included in all of our blog content is of general nature only. Any general advice included in this information has been prepared without taking into account your objectives, financial situation or needs.
Because of this, you should consider the appropriateness of the general advice to your objectives, financial situation and needs and obtain professional advice before acting on any general advice that we have provided to you.

 

Want to learn more about education funding, risk management and insurance, self-managed super fund, and more?