As groceries, utilities, and everyday costs continue to climb, it’s becoming harder for older Australians on fixed incomes to make ends meet. The pressure can take a toll, leaving many feeling anxious and drained.
The Cost of Living Longer Report 2024, commissioned by Australian Seniors with research group MyMavins, found nearly three in five retirees are facing moderate to severe financial challenges, with many struggling to cover essentials such as food, energy, and healthcare.
However, some relief was offered recently in the form of the Age Pension increase on September 20, 2025. More than 2.6 million pensioners saw a boost, with singles receiving an extra $29.70 a fortnight and couples $22.40 each.
While welcome, many older Australians say the rise is quickly swallowed by bills and everyday costs, leaving little breathing room. However, even a modest increase can make a difference. With the right strategy, retirees can stretch the extra dollars further — not only easing expenses but also helping to provide a little peace of mind.
So how can age pensioners make their money work harder and ease their financial concerns? Carrie-Ann McLean, author of Budget Right: Eliminate debt and improve your financial and mental wellbeing, suggests following her simple Budget Right method.
“With the Budget Right method, everyday expenses are covered within 70% of your cashflow,” McLean explains.
“If your increase means you’ve got a little excess in that 70%, use it to chip away at debts. Even small, steady repayments help you clear them quicker and reduce the interest you pay.
“For those big annual bills like car rego, rates or insurance, set up a separate account just for these expenses. Work out how much you’ll need each year, then divide it into a fortnightly amount. By transferring that amount every pension cycle, you’ll build up the funds gradually, so when the bill arrives, the money is already sitting there ready to go.
“And don’t forget it’s also worth shopping around each year for better deals on things like insurance and utilities. A quick phone call or comparison check can sometimes save you hundreds, which stretches your pension even further.”
McLean’s method breaks down as follows:
“Using this kind of split means your increase covers today’s needs and helps prepare for tomorrow,” McLean says.
“Even a few dollars set aside each fortnight grows into something useful over time.”
While money woes are being felt more now than ever, with a little planning and smart budgeting, the recent age pension increase can do more than just keep the lights on. It can help retirees feel more secure and ease their financial stress while also allowing for the possibility of a treat here and there. Proof that even small changes can make a big difference.