‘Tough’ X’mas with interest rate cut
Retirees may be in for a tough Christmas with the Reserve Bank taking official interest rates to their lowest level since the 2009 Global Financial Crisis, according to a seniors lobby group.
Retirees may be in for a tough Christmas with the Reserve Bank taking official interest rates to their lowest level since the 2009 Global Financial Crisis, according to a seniors lobby group.
The Reserve Bank cut the official cash rate from 3.25% to 3% yesterday.
“This interest rate cut, the fourth in 2012, isn’t good news for everyone,” National Seniors chief executive, Michael O’Neill, says.
“The cut comes as a blow to retirees who depend on their bank deposit returns for a small steady income.
“For many retirees readying to buy presents for the grandkids, the Reserve Bank will be the Grinch who stole Christmas,” he says.
According to Mr O’Neill, the impact of interest rate movements on retirees is usually offset by regular adjustments to the Centrelink deeming rates upon which pensions are calculated.
“However, the deeming rates haven’t moved since March 2010. Calls to adjust deeming rates have been met with silence,” he claims.
“With interest rates on a downward slide, it’s time for the federal government to step up and adjust the deeming rates.”
