Will you feel the impacts of today’s rate cut? 20



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Today the RBA announced the second rate cut for the year and reduced it by a further 25 points. It now stands at 2.0 per cent – historically the lowest Australia has ever seen.

This means a variety of things for Australians however for seniors, we’re all predominantly split into two groups. Those with cash invested, and those with cash debt that they owe. The outcome for each group will be vastly different.

For those with debt, this means relatively positive outcomes. Anyone who still owes money on a home loan, personal loan or credit cards will welcome lower interest fees. The last cut, in March, meant that a home loan of about $300,000 saw households about $45 better off each month based on the changes. Credit card debt and personal loan debt isn’t as high as this, however it does come into play as things will be slightly cheaper.

On the other hand, you have the retirees with cash invested in term deposits and variable interest savings accounts. The rate cut means that less interest will be returned, quite a burden when interest from bank deposit interest is the primary income during retirement.

The sad thing is that Australians owe banks over $2 trillion in loans while there are only about $800 billion worth of bank deposits – one quite clearly outweighs the other and therefore, that’s just what the economy needs to leverage.

After the GFC and so many schemes and dodgy financial advice hit older Australians very hard, cash investment became the apparent safest way to look after ones wealth. Sadly, these rate cuts will have a similar effect and will impact the average retirees ability to spend.

How long will the rates stay this way is anyone’s guess – according to Reserve Bank Governor, Glenn Stevens, it will be long enough to add further support to demand in the economy…


So tell us, will this rate cut affect you? Share your thoughts in the comments below… Is it good news or bad news for you? 

Starts at 60 Writers

The Starts at 60 writers team seek out interesting topics and write them especially for you.

  1. Bad news for us. Lost a lot if money in Super during GFC so put it in Term Deposit. Thought we were going to loose it all. Maybe put it under the bed now so we can get more pension. Have been hit both ways. Maybe the pensioners that are causing all the problems should give up babysitting for our working children and volunteering in hospitals, Meals on Wheels etc. We were hit with big interest rates when building our houses and got no handouts from the Government. Now in old age they still want us to carry the burden

    3 REPLY
    • PM didn’t change the interest rate , RBA did, Has been steadily going down since Labor got us into this HOLE, AND the super won’t affect ordinary people $832,000 If you have this much in super you are doing OK, Super Interest rate is higher than bank interest.

  2. People have found loopholes over the years to enable them to get a pension. Routing the system to benefit themselves and in doing so distorting the entire system. You said maybe you will put your cash under the bed so you can get more pension. Exactly my point. The pension is for those in real need.

    2 REPLY
  3. I am sick of this government trying to take everything of us, we were too late to have a good superannuation, maybe under the bed is a good solution.

  4. I hope Centrelink lowers the deeming rate. The deeming rate and the actual rate on savings do not match.

    1 REPLY
    • I would not count on that because that is what the Abbott government is trying to stop a pension increase at any cost. This government just plainly wants pensioners to die and go away, I’m not going anywhere.

  5. Yes I agree. With Dawn
    We have worked all our lives and now we are being penalised for it. Shame on you Abbott

  6. Doesn’t affect us house is paid off and we’re still working. Guess the interest on our savings goes down. Not that the bank interst was very high anyway.

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