The Australian Seniors Series: Cost of Living Longer Report 2024
- New report reveals growing anxiety about the future, with concerns over inflation and rising interest rates impacting retirement plans.
- Over 1 in 2 (52%) over 50s have felt financial stress impacting our social interactions.
- Nearly 3 in 5 (59%) admit to struggling to pay for essentials and other needs.
In 2024, as inflation and the cost of living puts increasing pressure on household budgets, many of us may need to re-evaluate the traditional retirement model – that familiar path of working hard, paying off the mortgage, and then seamlessly transitioning to a life of leisure.
A growing number of us are facing unprecedented challenges as we enter our retirement years. The cost of living continues to rise at an alarming rate, and for those relying on the aged pension, making ends meet is increasingly difficult. However, the impact extends far beyond mere financial strain. This cost-of-living crisis is having a ripple effect, impacting our wellbeing, social connections, and overall quality of life.
The Cost of Living Longer Report 2024 forms part of the Australian Seniors Research Series, exploring the issues that matter most to Australian seniors. Surveying over 1,200 over 50s, this report provides a detailed look at the challenges of maintaining financial security amid rising costs. It explores the impact on everyday life, from lifestyle choices to social connections, and uncovers the anxieties many of us are facing about our financial futures.
How much do I need to retire in 2024?
We've all worked hard our entire lives, contributing to society and looking forward to a well-deserved retirement. But for many of us, the reality is setting in: the rising cost of everything, from groceries to electricity, is making it harder and harder to make ends meet – even on a pension.
More than half (55%) of us are feeling the pinch of the rising cost of living, finding it increasingly difficult to manage our expenses on a pension. For 1 in 3 (34%) pensioners, the impact is even more significant, described as either severe (16%) or considerable (18%). On average, pensions cover just 76% of monthly expenses, with a significant 68% of that income going towards essentials like housing, utilities, and groceries. This leaves very little wiggle room for unexpected costs, let alone those little extras that make life enjoyable.
It's no surprise that close to 7 in 10 pensioners (69%) don't believe the aged pension alone will be enough to cover their living costs. Sadly, a mere 1 in 10 (10%) feel confident about their financial future relying solely on the pension, while 1 in 5 (21%) remain uncertain. As we age, the reliance on the pension is only expected to grow, with nearly 9 in 10 (86%) pensioners anticipating they'll depend on it even more in the years to come. Adding to these concerns, nearly 3 in 4 pensioners (74%) worry that inflation and rising interest rates will erode their quality of life.
Carolyn McColl, President of the Board for Meals on Wheels NSW, commented on the growing insufficiency of the aged pension amid the cost-of-living crisis: “The aged pension is no longer sufficient to meet basic living expenses, with rising costs forcing many elderly Australians to make significant sacrifices. Since the onset of COVID-19, nearly every aspect of daily life — groceries, utilities, fuel, council rates — has seen substantial price increases, leaving little to no room for essentials such as medical care or social engagement. Some are unable to afford heating during winter, while others rely on Meals on Wheels for affordable, balanced meals. Urgent action is needed to address this issue — either through a reduction in living costs or an increase in the aged pension — to ensure older Australians are treated with the respect and care they deserve, rather than being left behind.”
Lack of wellbeing and connection is taking a toll on us
We all know that financial stress affects more than just our bank accounts – it also impacts our mental and emotional health. When you're constantly worried about money, it's hard to relax, enjoy life, and maintain strong relationships. Sadly, this is a reality for many in our community.
Over 2 in 5 (43%) of us report that financial worries are having a moderate to severe impact on our emotional health, often leading to increased stress, anxiety, and a sense of hopelessness. This can contribute to a decline in overall quality of life.
The social implications are also significant. Over half (52%) admit that financial stress has affected our social lives, leading to fewer social engagements and a sense of isolation. More than 1 in 3 of us (34%) avoid social gatherings due to cost, and over 1 in 4 (26%) simply lack the motivation to socialise due to the emotional toll of financial worries.
Carolyn McColl has observed more seniors relying on the organisation for social connection, as well as access to affordable healthy meals: “Financial stress is a significant concern for many older Australians struggling to meet day-to-day living costs. Even accessing medical care can become a difficult choice if a doctor does not bulk bill, leaving pensioners to decide what they must sacrifice to afford essential healthcare. Programs like Meals on Wheels and community outings provide much-needed relief, offering affordable meals and opportunities for social connection that can help alleviate loneliness and stress. Simple joys, like a group trip to the beach or sharing a meal with friends, can make a meaningful difference. Addressing issues such as malnutrition and isolation is critical, not only for the well-being of our elderly but also to reduce pressure on hospitals and aged care facilities.”
What we are giving up in today's economy
Remember those carefree days of retirement we used to dream about? Lazy mornings, spontaneous lunches with friends, maybe even a holiday or two? For many of us, the reality is a far cry from that idyllic picture. The rising cost of living forces us to make difficult choices daily, and the sacrifices are adding up.
The research paints a stark picture of the daily sacrifices many of us are making to cope with these financial pressures. Nearly 4 in 5 (79%) are cutting back on everyday expenses, with dining out (60%), social activities (46%), and even essential home comforts like heating and cooling (41%) being the first to go.
Perhaps most concerning is the impact on healthcare. As many as 1 in 5 (20%) are delaying or forgoing necessary medical treatment due to cost, and nearly 3 in 5 (58%) have cut back on essential spending for a healthy lifestyle. This includes reducing expenses on personal care products (25%), vitamins and supplements (24%), healthy food (23%), and even medical appointments (20%).
Planning for a future of uncertainty
Retirement should be a time of peace, knowing we've worked hard and can now enjoy the fruits of our labour. But for many of us, the future feels anything but certain. The rising cost of living casts a long shadow, leaving us wondering if we'll be able to make ends meet, let alone enjoy our golden years.
As we look to the future, a sense of uncertainty prevails. While nearly half of us (48%) are relying on savings or emergency funds to manage unexpected expenses, a similar proportion (46%) anticipate making further cuts to non-essential spending – often the very things that bring us joy and enrich our lives.
What’s particularly concerning is that despite the clear need for support, many of us are hesitant to seek help. Over 4 in 5 (81%) have not sought financial assistance or support services, highlighting a potential gap in awareness or a reluctance to reach out. While options like reverse mortgages exist, they remain unpopular, with less than 1 in 20 (4%) having used them and only 1 in 10 (11%) considering them due to concerns about debt, high interest rates, and hidden fees.
The Cost of Living Longer Report highlights the real financial challenges facing our generation. But it also underscores our collective strength and determination to navigate these challenges with grace and optimism. By fostering open conversations, supporting each other, and advocating for policies that prioritise our wellbeing, we can create a future where retirement is a time of joy, connection, and financial security.
Carolyn McColl President & Treasurer - Meals On Wheels NSW
Carolyn has been a Meals on Wheels NSW Board member since 2014 and became President in 2024, following years of leadership as Treasurer and Chair of various sub-committees. A volunteer since 1983, she led the amalgamation of nine local services into the Bega Valley Co-operative, where she is now Chairman.
With a professional background in finance, IT, and leadership roles, Carolyn has also run her own bookkeeping business, combining technical expertise with a passion for community support.
5 Dec 2024