Enjoying retirement: Older Australians spending up big despite cost of living crisis

Older Australians are seemingly thriving amidst the cost of living crisis, with a recent Commonwealth Bank report indicating that seniors are enjoying their golden years by spending up big.

After the Commonwealth Bank analysed the spending habits of its seven million customers as part of its CommBank iQ Cost of Living Insights Report, they found that the spending of individuals aged 55 and above has risen significantly faster than the inflation rate in the past year, particularly among those aged 75 and older, who have increased their spending by approximately 13 per cent.

The findings also indicated that older Australians are enjoying holidays and going out for dinner more frequently. According to the data, the growth in spending at cafes and restaurants, as reported by the official Australian Bureau of Statistics, can also largely be attributed to older age groups.

Compared to last year, these cohorts are spending 18 percent more on dining out, whereas the spending increase among individuals under 35 is 7.1 percent.

“Putting our expenditure under the microscope shows we’re responding to the increased cost of living in diverse and sometimes unexpected ways,” CommBank iQ Head of Innovation and Analytics Wade Tubman said.

“What we’re seeing is a continued Covid rebound effect, with consumers catching up on the experiences that they missed out on during the pandemic. It seems counter-intuitive that at a time of increased cost of living pressures, consumers are choosing to boost their discretionary spending.”

Although Commbank’s findings paint a promising picture for older Australians regarding the cost of living crisis, they stand in stark contrast to findings from a recent report from the Council on the Ageing Australia (COTA).

COTA’s State of the Older Nation (SOTON) 2023 report surveyed the experiences and views of 2,750 Australians aged 50 and over, finding that a striking 45 per cent believe that their situation is worse, a significant rise from 2021 (33 per cent) and 2019 (27 per cent).

What’s more, the report raises concerns over the financial insecurity of working individuals, with 24 per cent unsure if they will ever retire, and 20 per cent facing payment difficulties leading to overdue bills.

New research released: things are getting worse for older Australianshttps://t.co/w4FBRbOrzp

— COTA Australia (@COTAAustralia) May 12, 2023

COTA Chief Executive Patricia Sparrow said that “the report’s findings underscore the need for the Australian government to develop a national strategy for older people so policymakers take urgent steps to address the concerns of older Australians to ensure they are more secure and resilient in the future.”

“Ageism is a perverse challenge which permeates the lives of older Australians and sits underlying this wider trend of growing insecurity,” Sparrow added.

Despite the Budget allocating a considerable amount to aged care spending in 2023-24, many older Australians remain concerned about their financial wellbeing, particularly regarding the housing crisis and the risk of homelessness.

A staggering six in 10 seniors reported that the cost of living is placing an enormous strain on their budget, a significant increase from just two years ago when only 31 per cent held similar concerns.

“Though we are pleased with the outcome of this year’s federal budget which provided some relief on the pressures older Australians are facing, there is still more to do,” COTA federation chair Joan Hughes said.

“The hip pocket of older Australians especially, older pensioners who rent, are still strained.”