20 May 2021
Cost of retirement up in the March quarter as petrol, eating out and entertainment costs rise.
The ASFA Retirement Standard March quarter 2021 figures indicate that couples aged around 65 living a comfortable retirement need to spend $62,828 per year and singles $44,412, both up by 0.4 per cent on the previous quarter.
Retirement budgets for those aged around 85 were up just 0.1 per cent from the previous quarter reflecting the different expenditure pattern in such budgets. The older retiree budgets were not affected by the increase in petrol prices, which were up a substantial 8.7 per cent in the March quarter, as there is no allowance for car ownership for this age group.
The overall increase in the March quarter All Groups CPI of 0.6 per cent was just a little higher than the increase in the budgets for those aged around 65. However, there were different factors at work for retirees relative to the overall population. For instance, the retiree budgets are not affected by the increases in the price of education and child care that impacted on the All Groups CPI.
“We saw a return to more normal conditions in the March quarter. In the previous few quarters there were suspensions or delays in certain price increases but now price increases are returning to a more standard pattern,” said ASFA Deputy CEO, Glen McCrea.
“There was an around 0.5 per cent increase in the price of meals out and takeaway foods, in part due to demand pressures as more consumers were able to dine away from home,” Mr McCrea said.
However, there are still significant differences in retiree lifestyles compared to the March quarter 2019. With retirees unable to travel overseas for a holiday at least some expenditure normally devoted to such recreation activity shifted to the purchase of furniture, appliances and home improvements. Retirees are now also starting to eat out more and take domestic holidays with the reopening of State borders. The cost of domestic holidays was up by 3.9 per cent over the year. Entertainment venues also are now generally allowed to operate at 100 per cent seated capacity, which saw cinemas and live theatre companies increase prices in the March quarter to pre-COVID-19 or higher levels.
While health insurance premiums remained unchanged for much of the year, these increased from 1 October by around 3 per cent for many retirees. There are now 2.2 million Australians aged over 65 with private health insurance, up from 2.0 million three years earlier.
Details for the retirement budget price changes
- Petrol prices climbed a substantial 8.7 per cent in the March quarter.
- Food prices were up by 0.4 per cent, with a return to eating out as lock-down conditions eased and as farmers restocked after the drought. Beef and veal were
up 3.7 per cent. - Fruit fell (-1.6 per cent), partially offsetting the rise in the price of food, due to favourable growing conditions leading to increased supply.
- Takeaway foods (+0.6 per cent) and restaurant meals (+0.5 per cent) rose as the continued easing of lock-down restrictions saw more consumers dining at restaurants, allowing restaurants to pass through input cost increases.
- The pattern of electricity price changes varied across the States, but the average fall was 0.9 per cent in the quarter with a 11.2 per cent drop over the year.
- Alcohol rose 1.0 per cent as prices returned from festive season specials alongside the pass through of the excise tax increase for beer and spirits.
- Telecommunication charges increased by 0.4 per cent, with new phones in the market replacing older discounted phones and with new higher priced NBN plans coming
into force.
Details for the various updated budgets follow.
Table 1: Budgets for various households and living standards for those aged around 65 (March quarter 2021, national)
| Household type | Single Modest | Couple Modest | Single Comfortable | Couple Comfortable |
|---|---|---|---|---|
| Housing – ongoing only | $102.60 | $115.29 | $120.36 | $125.70 |
| Energy | $32.81 | $44.07 | $41.57 | $51.55 |
| Food | $94.68 | $175.54 | $122.42 | $212.77 |
| Clothing | $20.49 | $38.94 | $27.37 | $50.97 |
| Household goods and services | $34.39 | $40.38 | $76.80 | $94.48 |
| Health | $51.45 | $99.30 | $105.37 | $197.24 |
| Transport | $89.62 | $95.73 | $146.26 | $158.68 |
| Leisure | $97.37 | $152.82 | $188.35 | $283.16 |
| Communications | $17.85 | $20.11 | $22.33 | $29.06 |
| Total per week | $541.27 | $782.17 | $850.81 | $1,203.60 |
| Total per year | $28,254 | $40,829 | $44,412 | $62,828 |
Table 2: Budgets for various households and living standards for those aged around 85 (March quarter 2021, national)
| Household type | Single Modest | Couple Modest | Single Comfortable | Couple Comfortable |
|---|---|---|---|---|
| Housing – ongoing only | $102.60 | $115.29 | $120.36 | $125.70 |
| Energy | $32.81 | $44.07 | $41.57 | $51.55 |
| Food | $94.68 | $175.54 | $122.42 | $212.77 |
| Clothing | $20.49 | $38.94 | $27.37 | $50.97 |
| Household goods and services | $52.59 | $75.37 | $155.41 | $186.12 |
| Health | $89.03 | $124.52 | $147.55 | $232.86 |
| Transport | $40.38 | $50.48 | $45.43 | $55.52 |
| Leisure | $63.50 | $90.99 | $131.19 | $184.39 |
| Communications | $17.85 | $20.11 | $22.33 | $29.06 |
| Total per week | $513.94 | $735.29 | $813.61 | $1,128.94 |
| Total per year | $26,827 | $38,382 | $42,470 | $58,930 |
The figures in each case assume that the retiree/s own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. All calculations are weekly, unless otherwise stated. Annual figure is 52.2 times the weekly figure.
More information
Costs and summary figures can be accessed via the ASFA website. Australians can find out more about superannuation on the independent Super Guru website.
For further information, please contact:
Jacqui Maddock, 0451 949 300.
About ASFA
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.
