Interest rate cut a blow for retirees
The Reserve Bank’s decision to cut interest rates this week is a blow for older Australians living off their investments, according to a seniors lobby group. The official rate dropped by 25 basis points, taking the official cash rate to 3.25%.
The Reserve Bank’s decision to cut interest rates this week is a blow for older Australians living off their investments, according to a seniors lobby group.
The official rate dropped by 25 basis points, taking the official cash rate to 3.25%.
National Seniors chief executive, Michael O’Neill, said the downward movement had come as a shock to older Australians.
“There are two sides to this story: while families celebrate, retirees feel the pinch,” he said.
“An interest rate fall is a blow for retirees living off simple term deposits. Older Australians are seeing their incomes dwindle as basic living costs such as rent and electricity rise.”
According to Mr O’Neill, to make matters worse, the official deeming rates, which are supposed to even out interest rate movements, haven’t shifted since 2010.
“Pensioners are still being assessed as earning 4.5% from their investments by Centrelink.
“It’s time for the federal government to step up, match interest rate movements and lower the social security deeming rates. Low bond yields, market volatility and falling interest rates are a triple whammy for seniors,” he said.
The announcement comes as speculation mounts that the government is planning to cut superannuation concessions in the mid-year budget review.
