Smart and simple tips to make the most of your Age Pension

From September 20, 2025, over 2.6 million older Australians will receive a welcome boost to their Age Pension payments.

For those receiving the full single rate of Age Pension, Disability Support Pension, or Carer Payment, their payments will rise by $29.70 per fortnight, while couples on the full pension will receive an extra $22.40 each.

While the increase offers some relief, many older Australians say it barely scratches the surface when it comes to covering rising everyday costs.

Following the announcement, hundreds took to the Starts at 60 Facebook page to share their thoughts — and the message was clear: while every dollar helps, life on the pension is still a financial balancing act.

Adding to these concerns are findings from the Cost of Living Longer Report 2024, commissioned by Australian Seniors in partnership with research group MyMavins.

The study, which surveyed more than 1,000 Australians aged 50 and above, revealed just how hard rising prices are hitting older households.

Alarmingly, the study found that nearly three in five (58 per cent) are facing moderate to severe financial challenges due to rising costs, with one in 10 (10 per cent) experiencing severe difficulties.

With the cost of living continuing to bite, knowing how to make every dollar work harder has never been more important. Thankfully, there are practical steps you can take to stretch your age pension further and stay in control of your finances.

Carrie-Ann McLean, author of Budget Right: Eliminate debt and improve your financial and mental wellbeing, says older Australians can take simple, immediate steps to get more from their pension.

“Every dollar counts right now and a few immediate actions can make a big difference,” McLean explains.

A few of her top tips include:

• Track where your money is going – Use a simple notebook or free app to see what’s really being spent weekly. Awareness leads to better decisions.
• Align spending with your pension cycle – Plan expenses around payment dates to avoid late fees and reduce the temptation for impulse purchases.
• Review recurring bills – Energy, phone and insurance providers often have better deals for long-time customers, but you have to ask for them. Don’t hesitate to negotiate.
• Use concessions to your advantage – Pensioner discounts can cut transport, utility and prescription costs significantly. Many people are eligible but don’t know it.

McLean also recommends following a simple budgeting method that can help you feel more confident and in control of your money, even on a fixed income.

“One of the most empowering ways older Australians can manage their money is by following the 70/10/10/10 rule. A simple structure that creates balance and control even on a fixed income,” she says.

Here’s how it works:

• 70 per cent of the pension goes towards essentials: rent, groceries, bills, transport, and medication.
• 10 per cent is for “Splash Cash” or “Enjoyment” – something just for you. Whether it’s a coffee with a friend, a puzzle book or lunch out once a month, this bucket keeps the budget sustainable and prevents feelings of deprivation.
• 10 per cent goes into savings or an emergency fund – even $10 a fortnight builds peace of mind over time.
• 10 per cent can be used for giving, gifting, or future goals – whatever matters most to you.

“What’s most important is giving yourself permission to enjoy a portion of your money guilt free,” McLean says.

“Even during a cost-of-living crisis, setting aside a little for joy and connection can make a big difference to mental wellbeing and help avoid overspending down the line.

“By prioritising your spending with a simple structure like this, you stay in control – making your pension work for you, not the other way around.”

While the upcoming increase will provide some relief, stretching your pension further often comes down to smarter planning and knowing where to save. By tracking your spending, maximising discounts, and following a clear budgeting system, you can help create a little more breathing room — and enjoy life’s simple pleasures without guilt.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.