Retirees slash spending due to COVID-19 concerns
New research from YourLifeChoices preferred partner Challenger revealed that almost half of retirees aren’t confident about their financial security over the next five years.
The survey revealed how older Australians have cut back on everyday necessities and travel, with 65 per cent of retirees feeling concerned about their retirement income in general.
Of almost all adults (97 per cent) aged 40 and over questioned were concerned about the Australian economy, more so than their own health and wellbeing (81 per cent).
More than three-quarters said they were worried about their family or friends’ job status (77 per cent).
“Sixty-five per cent of retirees are concerned about their income during retirement and 57 per cent said they plan to make changes to their finances,” said Challenger chief executive of distribution, product and marketing, Angela Murphy.
“Due to feeling uncertain about the future, unfortunately for many this means they are cutting back on necessities like food and energy bills.”
Retirees and non-retirees are closely monitoring their everyday spending to alleviate their financial stress, by reducing expenditure on clothes and accessories (46 per cent), making changes to energy bills (12 per cent) and amending insurance plans (9 per cent).
More than a quarter (27 per cent) are reducing their food shopping expenses and 37 per cent are spending less on clothes. Six per cent of retirees plan on cutting out travel and holidays.
However, despite their concerns, only half of all respondents have taken or are planning to take action to address their worries.
Nearly a third of the respondents (29 per cent) who expressed worries around their financial wellbeing hadn’t done anything to alleviate their concern.
“We know from our previous research in this area that when people feel overwhelmed by their financial situation they tend to stagnate because they find the choices too complex or they simply don’t know how to take the first step,” said Ms Murphy.
“The coronavirus pandemic has put retirement income in the spotlight and many older Australians are evidently questioning the confidence they previously had about their financial situation and what this might mean for their retirement plans over the longer-term.”
Are you worried about your retirement income now? How long do you think your savings will last? Are you actively monitoring your spending due to concerns over COVID-19, or would you be doing it regardless?