Annual living costs continue their upward trend across all living indices, with ABS data highlighting a 3.4% increase for age pensioner households – the largest in the December 2021 quarter among all demographics.
The Living Cost Index (LCI) details the impact of changes in prices on the living costs of different groups of households – employees, age pensioners, other government transfer recipients, self-funded retirees and pensioner and beneficiaries.
Across all five groups annual living costs reached an average of 3.5%, a growth of 100 basis points since the September 2021 quarter.
ABS Head of Prices Statistics Michelle Marquardt said increases in living costs continue to be spurred on by dramatic rises in automotive fuel prices.
"Automotive fuel prices have increased 32% in the last 12 months and continue to be the largest contributor to higher living costs for Australian households," Ms Marquardt said.
Since the September 2021 quarter, automotive fuel prices have risen a further 7% to a 31-year high off the back of higher global oil prices amid economic recovery and limited oil supply.
Despite this growth, the ABS notes the impact of price changes on household living costs can vary between household groups due to the different spending patterns of households.
This is particularly the case with aged pensioners as ABS data found increasing food costs to be the highest proportion of overall spending for age pensioner households when compared to the other groups.
"Age pensioner households also experienced the highest annual increase for housing costs, with relatively higher expenditure levels on maintenance and repair and property rates," Ms Marquardt said.
"Consequently, this household group had the highest annual living cost increase of 3.4%."
Council on the Ageing (COTA) CEO Mark Tucker-Evans said in light of the ABS data released Wednesday, financial security among older Australians remains mixed, and a growing number are struggling to meet basic financial commitments, with many unable to pay for utilities, groceries and rent on time.
"COTA Queensland is concerned about the continuing stress that age pensioners are experiencing," Mr Tucker-Evans told Savings.com.au
“The pandemic has had an impact on household income, personal income, number of hours worked, and number of hours spent volunteering of older Australians.
“Over 22% of older Australians now feel insecure about their finances lasting the remainder of their lifetimes.
“Australians need certainty about retirement incomes that covers superannuation, pensions, taxation, concessions and support for participation in the workforce - COTA has advocated that the Government take an integrated policy approach to retirement incomes."
Such 'integrated policy approaches' include the proposed policy that all superannuation funds (excluding SMSFs) will have to develop and publish a retirement income strategy for members by 1 July 2022.
Image by Vitaliy M via Pixabay.
Ready, Set, Buy!
Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!
With bonus Q&A sheet and Crossword!