The cost of living for retirees increased again in the last quarter of 2021, driven by inflation, leading to the highest rise in the cost of living across in a year for more than a decade, according to the Association of Superannuation Funds of Australia (ASFA).
Releasing its Retirement Standard figures for the December quarter 2021, ASFA stated a couple aged around 65 living a comfortable retirement would need $64,771 a year, an increase of 1.5 per cent on the previous quarter, while singles living at the same standard would need $45,962 a year, up by 1.6 per cent.
The superannuation industry peak body noted the increases were predominantly due to higher fuel and healthcare costs, which in turn led to the highest annual rises in living standard budgets since 2010, with prices up by 3.5 per cent for the comfortable couple budget and 3.9 per cent for the comfortable singles budget.
Additionally, those rises were higher than the increase in the December quarter All Groups Consumer Price Index (CPI) of 1.3 per cent, resulting in price rises for retirees exceeding those for employees.
The industry body pointed out retirees were not always able to avoid price increases through switching what they purchase and non-discretionary annual inflation was higher than the CPI and more than twice the rate of discretionary inflation.
ASFA deputy chief executive Glen McCrea said retirees were facing pressure on their budgets from non-discretionary inflation and “this means unavoidable price increases on goods and services such as food, petrol and health costs”.
McCrea added that while health costs were subsidised by governments, out-of-pocket expenses were still high for items such as dental treatments, gap payments for procedures in hospitals and emerging items such as the cost of COVID-19 rapid antigen tests.
“Over the last couple of years, the balances of women and low-income earners have been impacted by the acceleration of price increases, COVID-19 and policies such as the early release of super,” he said.
“It is crucial that the government addresses the repair of people’s retirement budgets as we start to see the other side of the COVID-19 crisis.”