Older Australians are feeling the cost-of-living crisis more than ever as living costs surge, with general insurance continuing to be a particularly heavy burden. Rising premiums aren’t just an inconvenience, they are now deeply affecting daily lives.
YourLifeChoices’ latest Retirement Affordability Index (RAI) has revealed that general insurance premiums for cars and other vehicles, and house and contents, are up, reflecting higher costs from natural disasters.
General insurance costs skyrocket
According to the latest data on general insurance costs, premiums jumped by 3.1 per cent this quarter and a jaw-dropping 14 per cent over the past year.
For older Aussies, many of whom own homes and cars, these rises are hitting hard. Living on a fixed retirement income means every dollar counts, and higher insurance premiums make balancing budgets even tougher.
Housing costs keep climbing
Inflation isn’t sparing housing. Rents surged by 2 per cent this quarter and 6.7 per cent over the past year. Older Australians renting their homes are really feeling this pinch. Despite a 10 per cent increase in rent assistance from July, it’s just a drop in the bucket compared to the ongoing rise in rents. Electricity rebates that started in July offer some relief, but barely scratch the surface of the problem.
Essential costs add up
Food prices have seen a slight moderation, but fruit and vegetables jumped another 6.3 per cent this quarter. You can’t really cut back on essentials like these. For older Australians with fixed budgets, these spikes directly impact their wallets.
Health costs are another big concern. Private health insurance premiums increased in April, and older Australians, who tend to have greater and more costly health needs, are feeling every bit of that increase.
Transport costs bounce back
Transport costs are climbing again. Petrol prices rose 1.7 per cent this quarter after falling last quarter. Older Australians rely on their vehicles to stay connected and mobile, and with rising motor vehicle insurance premiums, the financial strain intensifies.
Harder hit for lower-income groups
Inflation affects everyone differently. Since June 2021, the consumer price index (CPI) has gone up 16.1 per cent. But it’s worse for lower-income households, including many older Australians relying on pensions. Cash-strapped singles, for example, have seen an 18.2 per cent rise.
For older Australians essentials such as housing and food take up a larger portion of their budgets. Housing alone accounts for half of the inflation pressure on cash-strapped singles, compared to just 20 per cent for more affluent couples. The trope of cashed up home owning retirees is far from reality as many older Australians continue to bear the brunt of rising costs.
The uneven impact of inflation on different income groups revealed in this report highlights how uneven the cost-of-living crisis is. And while some economists are pointing to better days in the next few years, as our climate and extreme weather events become more frequent our older Australians, when it comes to insurance, seem to be bearing the brunt of these costs with no sight in end.
Have your insurance premiums gone up recently? By how much? Let us know in the comments section below.
Also read: How over-50s can get the best-value car insurance
Ten years ago our home and contents insurance cost about 700 dollars then it started to rise rapidly and we dropp
Ed it several years ago. I recently obtained some quotes and they were around 5,000 dollars. So we will remain uninsur
Ed as pensioners can not afford to pay that much.
I have only contents insurance, as I’m renting and don’t have a car. Even that has skyrocketed. I managed to talk them down a few dollars but next time I’ll be looking at options more carefully.