The increase of health insurance premiums in October has resulted in a higher cost of retirement, up by 0.9% on the previous quarter, for retirees aged around 65 who will need to spend $62,562 per year for couples and $44,224 for singles to remain a comfortable retirement, according to data.
Data from the Association of Superannuation Funds Australia (ASFA) found that although health insurance premiums remained unchanged for much of the last year, from October they increased by around 3% for many retirees.
ASFA said there are now 2.2 million Australian aged over 65 with private health insurance as compared to two million just three years earlier.
“COVID-19 impacted on just about every aspect of Australia's financial and economic conditions. Now, price increases are returning to a more standard pattern following a few quarters of suspension or delay in key costs, such as health insurance premiums,” said ASFA deputy chief executive, Glen McCrea.
At the same time, older retirees continued to experience financial pressures, with retirement budgets for those aged around 85 up by around 0.9% from the previous quarter for couples and by around 1% for singles.
The data also suggested that during the quarter there was a 6.3% increase in the price of domestic holiday travel and accommodation, in response to the opening of state and territory borders (at least for a time) and commencement of the peak summer period, as well as there was a 1.1% increase in the price of meals out and takeaway foods, in part due to more consumers being able to dine at restaurants.
However, there were still significant differences in retiree lifestyles compared to the December quarter 2019.
“The overall increase in the December quarter All Groups CPI of 0.9% was very similar to the average price increases for retirees. However, there were different factors at work for retirees relative to the overall population. For instance, the retiree budgets are not affected by the significant rises in the price of childcare,” ASFA said.