The most recent price increases are not the ones you were expecting.
The Consumer Price Index (CPI) for the September quarter shows that on average, the cost of living has risen by 1.9 per cent from last year, outstripping the last increase to the Age Pension.
Releasing the latest data, the Australian Bureau of Statistics (ABS) reported that since the June quarter, the CPI has increased 0.4 per cent.
Surprisingly, the most significant price rises in the September quarter hit those with the travel bug. International holiday travel and accommodation was 4.3 per cent higher and domestic holiday travel and accommodation rose 2.4 per cent, outstripping the current inflation rate of 1.9 per cent.
In fact, many price increases in the past quarter outstripped the increase in the Age Pension passed on in September. At that time, the total pension for a single person rose just 0.96 per cent.
In the YourLifeChoices 2018 Retirement Matters Survey, you told us which costs were the most challenging to keep up with. Energy and health expenses featured high in the responses, but in the last quarter, these two costs have either fallen or plateaued.
The September 2018 Retirement Affordability Index details how elements of the cost of living are affecting retirement incomes, depending on which of the YourLifeChoices’ tribes you belong to.
The upcoming December 2018 Retirement Affordability Index is likely to draw a different picture as other cost-of-living categories feature more heavily in the CPI’s price increases. They include:
- property rates and charges up 2.3 per cent, exceeding the current 1.9 per cent rate of inflation
- fruit, up 2.4 per cent, also higher than inflation
- food and non-alcoholic beverages, up 0.5 per cent
- housing, up 0.4 per cent
- recreation and culture, up 1.6 per cent
- clothing and footwear, up 0.2 per cent
- tobacco, up 1.8 per cent
- petrol, up 1.4 per cent.
Price falls included:
- furnishings, household equipment and services, down 1.2 per cent
- health, down 0.4 per cent
- communication, down 1.4 per cent
- childcare, down 11.8 per cent
ABS chief economist Bruce Hockman said: “Annual growth in the CPI fell back below 2 per cent in the September quarter.
“Modest rises in housing costs, including rents, utilities and property rates, and a fall in child care out-of-pocket expenses, saw a subdued rise in the CPI this quarter.”
Do you think you will be considerably affected by the latest CPI increases? If the last increase to the Age Pension was less than one per cent, do you think that the last quarter’s price rises have left you out of pocket?
To make the most of your money in retirement, first you need to know the rules. The RetirePlanner™ tool has all the information you need.
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