ASFA retiree standard reaches record high

The Association of Superannuation Funds of Australia (ASFA) has released the latest statistics on its Retirement Standard for the December 2023 quarter, hitting an all-time high.

The standard came in at $72,148 per year for couples and $51,278 per year for singles, after prices for insurance, electricity and food soared, leaving the standard to record an annual increase of approximately 3.5 per cent. ASFA said the standard’s quarterly increase aligned closely with the increase in the general Consumer Price Index (CPI).

The ASFA Comfortable Retirement Standard also included the costs of everyday expenses such as health, communication, clothing and household goods, as well as expenditure specific to lifestyle and community.

“Retiree budgets have been under substantial pressure for the past two years due to the high cost of essential goods and services,” ASFA CEO, Mary Delahunty, said.

“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 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.”

Insurance saw the largest price increase of 16.2 per cent in the 12 months to the December 2023 quarter, attributed to higher reinsurance, occurrence of natural disasters and claims costs. Food inflation fell 4.7  per cent in the December quarter to 4.5 per cent when compared to 12 months prior, with prices declining across all food categories. Fuel prices also dropped 0.2 per cent during the quarter despite some volatility,  while electricity prices jumped 1.4 per cent – slowing from its 4.2 per cent rise in the September quarter.

The Energy Bill Relief rebates, introduced in July 2023, have provided some much needed reprieve for households, saving them from a 17.6 per cent increase in electricity prices since the June 2023 quarter – they have only risen 5.7 per cent.