Australians are taking the hit from rising prices based on the latest data released today by the Association of Superannuation Funds of Australia (ASFA).
The industry body reveals the annual increase in the cost of living for some is the biggest seen in 12 years.
Just looking at retirees, Australian couples aged around 65 living a comfortable retirement need to spend at least $65,445 per year while singles $46,494, an increase of 1.0% and 1.2% respectively compared to the previous quarter.
Meanwhile, couples aged around 85 living a comfortable retirement need to spend at least $60,528 per year while singles at least $43,638.
Where prices are rising fastest
Over the year to March 2022, prices increased by around 4.2 per cent for the comfortable couple budget and by 4.7 per cent for the comfortable single budget.
‘While this is marginally smaller than the annual inflation impact of 5.1 per cent for wage earners, the reality is that retirees are doing it tough too,” said ASFA Deputy CEO, Glen McCrea. ‘Retirees have faced significant price increases for non-discretionary items such as food, automotive fuel, and health costs,‘ added Glen McCrea.
ASFA believes retiree households will continue to face ever increasing health costs.
“While there is considerable subsidisation of health costs and benefits being paid from private health insurance, out of pocket expenses remain substantial for items such as dental treatment, optical expenses, and gap payments for procedures in hospitals, and private health insurance premiums also continue to increase,” the report said. “Substantial increases in the cost of electricity and gas are also expected.”
Retirement budgets for those aged around 85 were up by 1.2 per cent from the previous quarter.
The older retiree budgets were not directly affected by the increase in petrol prices, which were significant in the March quarter, as there is no allowance for car ownership for this age group.
However, older retirees are facing other increases in costs including food and medical costs. Rising petrol prices also feed into the cost of goods and services purchased by older retirees.
Specific goods and services affecting retirees are on the rise:
- Vegetables (+6.6%) and fruit (+4.9%) rose due to COVID-related supply chain disruptions, and high transport and fertiliser costs.
- Meat and seafoods rose 4.8% due to herd rebuilding in response to favourable weather conditions, reducing supply.
- Waters, soft drinks and juices rose 5.6% due to packaging, ingredient and freight costs pressures while alcohol rose 1.0% as prices returned from seasonal specials and the excise tax increase for beer and spirits.
- Meals out and takeaway food rose 0.7% as the easing of restrictions saw restaurants and cafes review their prices to reflect higher input costs. However, this figure reflects the impact of State government voucher schemes. For those who had exhausted their vouchers the average cost increase of eating out was 1.2%.
- Non-durable household products rose 6.7% due to price rises for toilet paper and paper towels.
- Pharmaceutical products (+5.7%) and medical and hospital services (+1.8%) rose as a result of the cyclical reduction in the proportion of consumers who qualify for subsidies under the Pharmaceutical Benefits Scheme (PBS) and Medicare safety net.
- Over the past twelve months the price of medical and hospital services grew by 4.6%.
- Domestic and household services rose 0.9% due to price increases for hairdressing and gardening services.
- Private health insurance premiums rose on average by 2.7 % from 1 April with some major insurers increasing premiums by more than 3%.