Australians are being warned to prepare for an expensive Christmas this year, as the impact of the rising cost of living makes it mark felt on the festive season.
Research from comparison site, Finder, found that Australians are expected to spend $27.3 billion this Christmas, up from the $23.9 billion spent last year.
Money expert at Finder, Rebecca Pike said although “Christmas is a notoriously expensive time of year” with the “extra cost of living pressure” being felt across the country it becomes “an even bigger burden”.
“The festive season can be one of the happiest times of the year but for many households it can also be one of the most stressful,” Pike said.
Although Christmas may be a little less merry this year given the ongoing financial strain there are still a number of measures Australians can utilise to make every cent count this festive season.
Pike said when it comes to Christmas spending “it’s a good idea to set a budget” before braving the shopping centre crowds.
“You don’t want to be caught paying with credit unless you plan to pay it off in full before interest is charged,” she said.
“If money is tight, you could replace gifts with things like acts of service or experiences like a family picnic at the park.
“The last thing you want is a ‘debt hangover’ when the New Year comes around.”
Compare the Market’s General Manager of Media & Communications, Chris Ford also spoke of rising costs this Christmas, claiming that “it’s shaping up to be an expensive end to 2022 and with Christmas fast approaching, Australians will be looking for ways to reduce financial stress this festive season.”
“We’ve seen energy bills skyrocket, the price of groceries hit new highs, the halving of the fuel excise end and our insurance premiums increase – it’s hardly surprising that around half of Aussies will be spending less or looking for savings this Christmas,” Ford said.
The recent findings that point to a costly Christmas will surely come as devastating news for over 60s who are already facing numerous financial burdens.
Recent data from the Australian Bureau of Statistics (ABS) revealed older Australians are suffering the most from the rising cost of living.
In what has been the highest increase in 16 years, pensioners are experiencing an annual household living cost of 4.9 per cent at the time of the findings.
Head of Prices Statistics at the ABS Michelle Marquardt said the main culprit affecting older Australians is the increase in grocery prices, but household costs also played a large role.
“These households were also more affected by increases in housing costs, as they have relatively higher expenditure levels on utilities, maintenance and repair, and property rates,” Marquardt said.
Exacerbating the already troubling issue is findings from the Association of Superannuation Funds of Australia’s (ASFA) that a comfortable retirement for senior Australians has risen by 1.9 per cent, with those over 65 now needing to spend $68,014 per year for couples, and $48,266 for singles.
ASFA’s latest retirement standards reflect the increase seen to fruit and vegetables prices, up by 16.2 per cent, dairy products up by 12.1 per cent, imported inflation saw oils and fats up 19.3 per cent, coffee up 10.7 per cent and gas 16.6 per cent and automotive fuel 18.0 per cent.
— ASFA (@asfaAUST) November 16, 2022
Older Australians who are organising this year’s Christmas lunch may also face some difficulty after a recent report revealed that pensioners have been among the hardest hit by rising prices, with the weekly grocery shop having the greatest impact.
Following a comprehensive analysis of grocery prices across the country, Frugl Grocery Price Index found that annual grocery price inflation has risen to a record high of 9.49 per cent with the largest price increases being found in items such as dairy and eggs which saw an increase of 9.05 per cent and bread and bakery items at 4.94 per cent.
Alarmingly, the report also found that older demographics are facing the steepest price rises both annually and quarterly, with pensioners faced with a 15.31 per cent increase annually and 3.92 per cent rise quarterly in the cost of food.
“One conclusion is clear, our older generations are facing the highest price increases,” Managing Director and CEO of Frugl, Sean Smith said.
Despite all the doom and gloom facing over 60s, particularly as Christmas approaches, measures have been implemented that aim to offer a lifeline to older Australians who are struggling with the rising cost of living.
Most recently, those on the age pension were offered the chance to earn more income from working without reducing their pension payments.
From today pensioners over the Age Pension age will receive a $4,000 increase to their Work Bonus income bank from $7,800 to $11,800 until 31st December 2023
This provides an immediate benefit to any pensioner over Age Pension age who works and will help address labour shortages pic.twitter.com/hSLWJ2RzZK
— Amanda Rishworth MP (@AmandaRishworth) November 30, 2022
Under the Social Services and Other Legislation Amendment (Workforce Incentive) Act 2022, pensioners can now work more hours without facing financial penalties to their age pension payments.
The new changes mean age pensioners will now be able to earn an additional $4000 during this financial year without losing any of their pension.
In addition to the $4000 work bonus, thousands of older Australians are now eligible for a raft of discounts on healthcare, medication and even utility bills after income tests for the Commonwealth Seniors Healthcare Card were relaxed.
The changes that went into effect on Friday, November 4 see the income threshold for access to seniors’ health care cards increased from $57,761 to $90,000 for singles, and from $92,416 to $144,000 for couples.
An extra 44,000 seniors who can now access the cards will now be able to benefit from the scheme.
Social Services Minister Amanda Rishworth said the change aimed to “create a better Australia where no one is left behind and no one is held back” which according to Risworth “is particularly true for older Australians”.
From today more older Australians can access the Commonwealth Seniors Health Care Card.
This is another election commitment we’re delivering on to help ease the cost of living.
It will help improve access to medicines and the cost of seeing a GP. pic.twitter.com/b6eFWPL5LZ
— Amanda Rishworth MP (@AmandaRishworth) November 3, 2022
The greatest financial lifeline, however, came in the form of an increase in age pension payments on September 20, in what was the “largest indexation increase” for pensioners in 12 years.
The Age Pension rose by $38.90 for singles and $58.80 for couples, per fortnight, making the maximum fortnightly pension rate $1026.50 for singles and $1574.60 for couples (or $773.80 for each person in a couple).
More than 4.7 million Australians will receive a much-needed boost to their social security payments from this month to help ease cost of living pressures.
— Amanda Rishworth MP (@AmandaRishworth) September 5, 2022
Minister for Social Services, Amanda Rishworth, said the Consumer Price Index (CPI) is the driving factor behind the rise, noting the CPI had surpassed the Pensioner and Beneficiary Living Cost Index.
“We want to ensure Australia has a strong social security safety net to protect our most disadvantaged,” Rishworth said.
“Our guiding principles as a Government are ensuring no one is left behind and no one is held back and this indexation increase will help those on Government payments keep up with the cost of living.”