Increasing food prices hit retirees’ hip pockets

23 May 2019

Retirees have seen a slight increase in living costs over the last quarter, with the Association of Superannuation Funds of Australia (ASFA) Retirement Standard March quarter figures showing that costs were up 1.3 per cent for couples at both the comfortable and modest levels.

At the modest level there was no increase for singles and a 0.2 per cent rise for couples on the previous quarter, while budgets for older retirees specifically rose 0.3 and 0.4 per cent at the comfortable and modest levels respectively over that period.

While the overall rate of inflation was relatively low since the December quarter, some costs grew strongly. Medical and hospital expenses, for example, increased 1.3 per cent in the March quarter and 4.1 per cent over the last year, while the price of food and non-alcoholic drinks rose 2.3 per cent over the last year.

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Food costs in particularly jumped in the March quarter, showing the impact of the continued drought, with the price of vegetables up 7.7 per cent for the quarter, poultry up 2.9 per cent, and bread and fruit both up 1.8 per cent.

Savings for the March quarter came from price falls for automotive fuel (down 8.7 per cent), and for both domestic and international holiday, travel and accommodation, which were down 3.8 and 2.1 per cent respectively.

Speaking on the slight changes, ASFA chief executive, Dr Martin Fahy, said: "While for many, the overall cost of retirement was largely unchanged over the most recent quarter, prices have been going up at a greater rate for a number of items.

“The relatively low rate of inflation has brought interest rates for bank deposits to historical low levels, placing pressures on the household budgets for retirees relying on income from term deposits and similar investments.”

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