Aging retirees experience higher cost of living increases

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Annual increases in the cost of living ranged between 2.6% for employee households and 3.4% for elderly pensioner households in the December quarter of 2021, according to the latest data from the Australian Bureau of Statistics ( abs).

ABS price statistics manager Michelle Marquardt said: “Automotive fuel prices have risen more than 30% over the past 12 months and continue to be the largest contributor to the rising cost of life for Australian households.”

Cost of living indices show the impact of price changes on the cost of living of different groups of households: wage earners, older retirees, other recipients of government transfers, self-funded retirees, and retirees and beneficiaries.

The impact of price changes on household cost of living may vary across household groups due to different household spending habits.

“Food accounts for a higher proportion of overall spending by older retiree households compared to other household types. Elderly retiree households also experienced the largest annual increase in housing costs, with relatively higher levels of spending for maintenance and repairs and homeownership rates. Consequently, this group of households saw the largest annual increase in the cost of living, at 3.4%,” Ms. Marquardt said.

Mortgage interest charges were down 1.6% in the December quarter and 7.4% over the past 12 months.

“Lower mortgage interest costs continue to reduce the cost of living for households with a mortgage. This means that employee households saw the smallest annual increase, at 2.6%, as mortgages account for a higher proportion of their overall spending,” Ms. Marquardt said.

During the December 2021 quarter, prices for automotive fuel (+6.6%), domestic vacation travel and accommodation (+4.8%) and tobacco (+2.1%) increased .

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