Retirees are being hit harder by rising prices than the general population, with the costs that dominate their budgets rising quicker than inflation, according to the updated ASFA Retirement Standard released today.
This underscores the importance of super savings for Australians who want to live a more comfortable lifestyle in retirement to what is possible on the Age Pension alone.
While the CPI rose 3.8 per cent in the 12 months to June 2026, the items that make up a large share of retirees’ spending rose much faster:
- Electricity up 22.4 per cent after the end of Commonwealth and State rebates
- Maintenance and repair of vehicles up 6.5 per cent
- Medical and hospital services up 5.0 per cent
- Insurance up 4.9 per cent
- Hairdressing and personal grooming services up 4.2 per cent
- Meals out and takeaways up 4.0 per cent
The one significant relief was petrol and diesel, which fell 7.3 per cent over the year on lower global oil prices and the temporary fuel excise cut.
“Retirees are among the groups hit hardest by the cost-of-living crisis because their budgets are weighted towards the things going up in price the most,” said ASFA CEO Mary Delahunty.
The Age Pension is adjusted twice a year in line with what pensioners actually spend, so someone living on the pension alone is broadly protected from price rises. Retirees living a comfortable lifestyle, however, are not. They spend on things the pension does not cover, like private health cover, a car and holidays, and those prices have been rising faster than the Age Pension.
The result is that the gap between the Age Pension and a comfortable retirement is getting bigger every year, and retirees’ super has to work harder to fill the gap.
“Super is the buffer between a life in which the bare essentials are covered by the Age Pension, and feeling comfortable and financially secure in retirement,” Ms Delahunty said.
Super turns a safety-net retirement into a comfortable one
A comfortable retirement for a couple who own their own home now costs $1,513 a week, or $78,998 a year. For a single homeowner, it costs $1,076 a week, or $56,166 a year.
The maximum Age Pension is currently $905 a week for a couple and $600 for a single, which will rise slightly on 20 September. The full Age Pension covers around 60 per cent of a comfortable retirement for a couple and around 56 per cent for a single.
“The Age Pension is a social welfare net that guarantees no older Australian has to live in poverty. It was never designed to fund the kind of lifestyle in retirement that most Australians aspire to. Super is the difference between watching every dollar and having a sense of financial security in retirement,” Ms Delahunty said.
| Comfortable retirement | Modest retirement | Maximum Age Pension rate | Gap between Age Pension and comfortable retirement | |
| Single, weekly | $1,076 | $700 | $600 | $476 |
| Single, annually | $56,166 | $36,548 | $31,223 | $24,943 |
| Couple, weekly | $1,513 | $1,009 | $905 | $608 |
| Couple, annually | $78,998 | $52,690 | $47,070 | $31,928 |
Note: Figures are for homeowners aged 65 to 84. Age Pension figures are at the maximum rate including supplements from 20 March 2026, consistent with the June quarter Retirement Standard. Rates increase on 20 September 2026.
What life looks like at each level
The three levels differ little on essentials like food and utilities. The difference is in the discretionary spending that makes life comfortable.
“At the comfortable level, a couple can afford top-level private health insurance, eat out most weeks, take a domestic holiday each year and an overseas trip every few years. They can run a good car that is regularly serviced. At the modest level, health cover is basic, probably a hospital plan only, holidays are domestic only, and you eat out very occasionally.
“On the Age Pension alone, most of these things drop out of your budget entirely,” Ms Delahunty said.
| Weekly budget item for a homeowner couple | Comfortable | Modest | Age Pension only |
| Health insurance | $104 (top-level cover) | $40 (basic cover) | Medicare only |
| Meals out | $104 | $54 | Rare, low-cost |
| Domestic holidays | $88 | $61 | Rare, low-cost |
| Overseas holidays | $36 | None | None |
| Own vehicle including running costs | $204 (regularly replaced vehicle) | $121 (older vehicle or public transport) | Limited budget to own or maintain a car |
| Home internet and mobile phone | $59 | $46 | Basic mobile plan and limited home internet |
| New clothing and footwear | $56 | $43 | Very basic budget |
| Hairdressing services | $30 | $13 | Less frequent or home haircuts |
| Home improvements, repairs, maintenance | $34 | $26 | Essential home repairs only |
Quarterly changes
For homeowners aged 65 to 84, the comfortable retirement budget rose 0.5 per cent for couples and 0.4 per cent for singles in the June quarter. The modest budget rose 0.4 per cent for couples and 0.3 per cent for singles, to $52,690 and $36,548 a year respectively.
For retirees aged 85 and over, the comfortable budget is now $74,484 a year for a couple and $53,964 for a single. For retirees who rent privately, the modest budget is now $69,376 a year for a couple and $51,418 for a single.
Super is achieving its aims
Compulsory super exists to reduce retirees’ dependence on taxpayers, and it is working. Age Pension spending has fallen from around 2.6 per cent of GDP to around 2.3 per cent even as the population has aged, and Treasury projects it will fall below 2 per cent by 2066 because of super.
ASFA research released last week, Poorer retirees, higher taxes: The alternatives to 12 per cent compulsory superannuation, models what happens if the 12 per cent system is unwound. Cutting compulsory super to 9 per cent would add around $15 billion a year to the Age Pension bill and move an extra 10 per cent of retirees onto welfare.
A 30-year-old on average full-time earnings who took three years of super as cash under One Nation’s proposal would receive around $54 a week now and retire with $23,900 less in today’s dollars.
“With super at 12 per cent of wages, the average worker earning $110,000 is finally on track to retire at the comfortable standard. Any erosion of 12 per cent super would undo the gains our country has made on working Australians retiring with dignity.
“Super is individuals’ money set aside for their retirement, not a convenient pot for governments to solve other policy problems. The cost-of-living and housing crises need their own solutions. Forcing Australians to solve them by robbing from their own future selves is not a helping hand. It is a worse deal than previous generations had,” Ms Delahunty said.
The full June 2026 quarter Retirement Standard budgets are available here.
Members of the media may contact:
Scott Roberts
Media and Content Lead
sroberts@superannuation.asn.au
0451 949 300
About ASFA
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry, and the only industry body that represents all parts of the APRA-regulated system.
Our more than 100 members include retail, industry, corporate and public sector funds and their service providers. For over sixty years, ASFA has been the voice of super, advocating for a dignified retirement for all Australians. Through research, advocacy and collaboration, ASFA promotes efficiency, sustainability and trust in Australia’s world-class retirement income system.
