Rising energy costs are putting increased pressure on retirees' budgets and those living in Victoria are the hardest hit, the Association of Superannuation Funds of Australia (ASFA) has found.
According to year on year figures from ASFA's Retirement Standard, energy prices rose about 17 per cent over the year and contributed to a rise of 30 per cent over the past two years.
Although living expenses were close to the national average across all categories, Victorian energy costs meant retirees looking to fund a ‘modest' or ‘comfortable' retirement in that state were under more pressure.
ASFA found single retirees in Melbourne needed to spend around $23,024 per annum to fund a ‘modest' lifestyle — 1.6 per cent above the national average — while a couple living a ‘comfortable' retirement would need to spend about $56,888 per annum — 0.9 per cent above the national average.
Health care costs also increased significantly over the 12 months to June, rising 6.6 per cent — in large part because of a 9.9 per cent rise in hospital and medical costs and an increase in health insurance premiums from 1 April, ASFA said.
Across the country, the cost of living increased 2.9 per cent for the ‘modest' category and 2.1 per cent for the ‘comfortable' category compared to a 2.4 per cent increase in the All Groups CPI over the year.
Single Australians needed $430,000 to fund a ‘comfortable' retirement, ASFA said, so people should be saving early. A 30-year-old on $50,000 annually needed to contribute an extra 3 per cent of their wage and those 50 years old with a superannuation balance of $150,000 and $100,000 annual salary would need to salary sacrifice an additional 1 per cent, ASFA said.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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