Retirees feel pinch

Cost of living skyrockets

PENSIONERS and other retirees are feeling the financial strain from a decade of hefty price rises in their essential services, forcing many to cut spending on other household items and leisure activities.

Health expenses, energy bills, rates and home insurance costs have jumped 50-100 per cent in a decade, and now cost a single pensioner more than $154 a week combined.

The ASFA Retirement Standard, which estimates spending needs for both modest and comfortable retirements, shows that a modest retirement now costs up to 34 per cent more than it did 10 years ago, at $470 a week for a single and $675 for a couple.

A financially-comfortable retirement costs up to 24 per cent more — $844 for a single or $1159 for a couple.

ASFA added health insurance as a cost for modest retirees in 2010, while comfortable seniors are spending 60 per cent more on health today.

ASFA research director Ross Clare said medical and hospital costs were rising quickly globally and 54 per cent of retirees now had private health insurance.

Retirees are spending less on things such as home repairs and maintenance, computer equipment, cinemas, sports and day trips, appliances and other household goods.

“For some retirees, substantial increases in unavoidable expenditures squeeze what is available for discretionary purchases such as leisure,” Mr Clare said.

Modest retirees are spending twice as much on domestic holidays — now $970 a year, but zero on international travel.

Comfortable retirees spend $4100 on domestic vacations and $2900 on overseas trips.

Prices for most essential services have climbed faster than official CPI inflation, which was up 26 per cent in the 10-year period.

Goldsborough Financial Services planner Lachlan Harvey said many retirees felt frustrated by the rises.