The Association of Superannuation Funds of Australia (ASFA), the voice of super, finds retirees continue to face significant cost pressures on their household budgets due to high insurance, electricity and food prices.
The ASFA Retirement Standard December quarter 2023 hit a new record high of $72,148 per year for couples, and $51,278 for singles, taking the annual increase to around 3.5 per cent. The quarterly increase is about the same as the increase in the general CPI, with the annual increase lower than the 4.1 per cent increase in the general CPI. The ASFA retiree budgets exclude some items which contributed to the overall CPI figure.
“Retiree budgets have been under substantial pressure for the past two years due to the high cost of essential goods and services,” said ASFA CEO, Mary Delahunty.
“Fortunately, we are seeing price increases in the key categories that make up retiree budgets – home and content insurance, fruit and vegetables, fuel and electricity – begin to ease.”
The ASFA Comfortable Standard includes the cost of everyday expenses such as health, communication, clothing and household goods and reflects community expectations as well as changing lifestyle expectations and spending habits.
“The cost of medical services increased 1.2% in the December quarter, and over the summer months the cost of domestic holiday travel and accommodation rose by 3.9 per cent,” added Ms Delahunty.
Spending categories showing largest quarterly price increases:
- Insurance prices rose 16.2 per cent in the 12 months to the December 2023 quarter, which is the strongest annual rise since March 2001. Higher reinsurance, natural disaster and claims costs contributed to higher premiums for house, home contents and motor vehicle insurance.
- Annual food inflation eased to 4.5 per cent in the December quarter, down from 4.8 per cent in the September quarter and the peak of 9.2 per cent in December 2022. Price rises have been lower across all food categories, while fruit and vegetable prices fell 0.2 per cent compared to 12 months ago.
- Automotive fuel prices fell 0.2 per cent in the December quarter, albeit from a near record high level. Average unleaded petrol prices were volatile over the quarter, from a high of $2.13 per litre in early October, to a low of $1.78 per litre in mid-December.
- Electricity prices rose 1.4 per cent in the December 2023 quarter, compared to a rise of 4.2 per cent in the September quarter. Over the past 12 months, electricity prices have increased 6.9 per cent, down from the increase of 14.5 per cent in the 12 months to September. The introduction of the Energy Bill Relief Fund rebates from July 2023 has moderated the increase in electricity bills for many households. Electricity prices have risen 5.7 per cent since the June 2023 quarter. Excluding the Energy Bill Relief rebates, electricity prices would have increased 17.6 per cent over this period.
Details for the various updated budgets follow.
Table 1: Budgets for various households and living standards for those aged around 65 (December quarter 2023, national)
| Household type | Single Modest | Couple Modest | Single Comfortable | Couple Comfortable |
| Housing – ongoing only | $118.48 | $133.61 | $139.37 | $145.49 |
| Energy | $40.68 | $54.64 | $51.54 | $63.92 |
| Food | $109.64 | $203.27 | $141.76 | $246.38 |
| Clothing | $21.16 | $40.21 | $28.26 | $52.63 |
| Household goods and services | $39.40 | $46.25 | $85.24 | $105.69 |
| Health | $55.53 | $107.50 | $112.94 | $211.63 |
| Transport | $109.57 | $116.71 | $179.02 | $193.91 |
| Leisure | $113.03 | $177.47 | $221.33 | $332.71 |
| Communications | $18.29 | $20.61 | $22.88 | $29.78 |
| Total per week | $625.78 | $900.27 | $982.34 | $1,382.15 |
| Total per year | $32,666 | $46,994 | $51,278 | $72,148 |
Table 2: Budgets for various households and living standards for those aged around 85 (December quarter 2023, national)
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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.
For further information, please contact:
ASFA Media team, 0451 949 300.
About ASFA
ASFA, the voice of super, has been operating since 1962 as the peak policy, research and advocacy body for Australia’s superannuation industry. ASFA represents the APRA regulated superannuation industry with over 100 organisations as members from corporate, industry, retail and public sector funds, and service providers.
About the ASFA Retirement Standard
Since 2004 the ASFA Retirement Standard has served as a retirement companion for Australians, providing a reliable retirement savings guide by benchmarking the annual budget needed to fund either a comfortable or modest standard of living in the post-work years. It is updated quarterly to reflect inflation, reviewed regularly to reflect changes in lifestyle, and provides detailed budgets of what single people and couples would need to spend to support their chosen lifestyle. It is generally accepted by superannuation funds, financial planners, the media, web calculators and by fund members as the accepted benchmark for the adequacy of retirement savings.
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.
