‘Urgent action’ needed as age pension fails to cover basic living costs

The age pension is the most common form of income support for older Australians, helping to cover daily expenses. However, with the ongoing cost-of-living crisis, more retirees are experiencing financial stress, finding that the age pension is no longer enough to meet even basic needs.

This alarming trend came to light in the latest Cost of Living Longer Report 2024, commissioned by Australian Seniors in partnership with research group MyMavins.

The study surveyed over 1,000 Australians aged 50 and above, revealing the impact of inflation and rising costs on those relying on the age pension.

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 climb, seven in 10 (69 per cent) now fear that the age pension alone will not be enough to live on.

The financial strain has left nearly three in five (59 per cent) struggling to pay for essentials such as utilities and groceries.

Even more concerning, one in five (20 per cent) have delayed or forgone medical treatment due to costs, placing their health at risk.

Understandably, these difficulties are taking an emotional toll, with around two in five (43 per cent) reporting a decline in their quality of life over the past two years. For 21 per cent, this decline has been considerable or severe.

Carolyn McColl, President of the Board for Meals on Wheels NSW, expressed deep concern over the findings, calling for urgent action.

“The aged pension is no longer sufficient to meet basic living expenses, with rising costs forcing many elderly Australians to make significant sacrifices,” McColl said.

“Since the onset of COVID-19, nearly every aspect of daily life — groceries, utilities, fuel, council rates — has seen substantial price increases, leaving little to no room for essentials such as medical care or social engagement.

“Some are unable to afford heating during winter, while others rely on Meals on Wheels for affordable, balanced meals. Urgent action is needed to address this issue —either through a reduction in living costs or an increase in the aged pension— to ensure older Australians are treated with the respect and care they deserve, rather than being left behind.”

While broader policy changes are needed to address these financial challenges, retirees can also take proactive steps to help stretch their budgets and ease financial pressure. Financial expert Chris Brycki, founder and CEO of Stockspot, suggests several ways older Australians can cut costs.

• Government – Most governments provide seniors with discounts and reduced prices for items such as transport.

“Take a look at what your state/territory government provides. In NSW, permanent residents aged 60 and over can apply for either a NSW Seniors Card or Senior Savers Card,” Brycki said.

“This entitles the user to free items, discounts and access to special offers across government and non-government services.

“As an example, McDonald’s provides card holders with a free food item. The type of discounts differ from state to state and business to business.”

• Groceries – Brycki suggests that “where possible, bulk buy things when they go on sale, especially non-perishable items like cleaning products. Also look for special savings days.”
• Utilities – some utility providers offer a discount to seniors and retirees. Shop around to find a provider that offers discounts and to ensure you are getting the best prices.
• Healthcare – again shop around to ensure you have the best health cover available. Some providers give discounts to seniors provided they have a Seniors Card or are retired.

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.