It’s no secret that the cost-of-living crisis has been biting hard across Australia, but if you thought it was just the younger generations feeling the pinch, think again.

New data reveals that baby boomers—yes, our very own generation-are now suffering more than ever, and in some cases, even more than our working-age children and grandchildren.

This shift is raising fresh questions about how economic pressures are reshaping life for older Australians.


For a while, it was the working-age Aussies who were copping the brunt of soaring inflation and relentless interest rate hikes.

Remember those 13 rate rises in 2022 and 2023? Ouch! Mortgage repayments skyrocketed, rents soared, and the weekly grocery bill became a source of dread for many families.

But the tide has turned. With two interest rate cuts in 2025 and inflation dropping to its lowest level since the early days of the pandemic, you’d think things would be looking up for everyone.


Not so for age pensioners. According to the latest Australian Bureau of Statistics (ABS) figures, living costs for those on the age pension jumped by 2.7 per cent in the June quarter, outpacing both the 2.1 per cent headline inflation rate and the 2.6 per cent increase faced by employees.

Here’s the kicker: while rate cuts are a lifeline for workers still paying off a mortgage, most age pensioners have already paid off their homes.

That means we don’t benefit from lower interest rates the way our kids do. In fact, the ABS notes that employee households saw their living costs moderate thanks to falling mortgage interest charges, something that simply doesn’t apply to most retirees.


AMP’s deputy chief economist, Diana Mousina, explains it like this: 'Employees have had a larger upward increase in growth, in the times of high interest rates, they are seeing better outcomes now. There are very few age pensioners that still have a mortgage.'

So, what’s driving up our living costs? It’s not just the price of bread and milk. Healthcare, medical services, and food are all rising faster than the pension can keep up.

And while rents are still climbing, they’re not the double-digit monsters they were last year, thanks to a slowdown in immigration.

But for those of us on a fixed income, even modest increases can be tough to swallow.

To make matters worse, government payments like the age pension simply aren’t keeping pace with these rising costs.

The result is that many boomers are finding their budgets stretched thinner than ever.

Not all retirees are in the same boat. Those lucky enough to be self-funded—with healthy super balances and investments—have seen the lowest increase in living costs (just 1.7 per cent over the year, below the inflation rate).

Why? Strong investment returns and tax-free super after age 60 have given this group a buffer against rising prices.

They’re also more likely to spend on non-essentials like holidays and private healthcare, which, while still expensive, have risen less sharply than some other costs.

The Association of Superannuation Funds of Australia recommends $595,000 in super for a comfortable retirement for singles, and $690,000 for couples.

That’s enough for the occasional overseas trip and a few more luxuries, but it’s a far cry from the reality for many aged pensioners.

If you think age pensioners have it bad, spare a thought for those on other Centrelink payments. This group saw the most significant jump in living costs—2.9 per cent—and is even more reliant on government rebates to keep the lights on.

While payments like JobSeeker are indexed to inflation, the cost of services (think: healthcare, insurance, and utilities) is still rising at a painful 3.3 per cent.

It’s clear that the cost-of-living crisis isn’t hitting everyone equally. While some retirees are weathering the storm thanks to investments and super, many aged pensioners are finding it harder than ever to make ends meet.

With essential costs like healthcare and food outpacing government payments, there’s a real need for targeted support.

If you’re feeling the squeeze, make sure you’re claiming all the rebates and concessions you’re entitled to—energy rebates, council rate discounts, and health care card benefits can all help take the edge off.

And don’t be afraid to reach out for help; community organisations and financial counsellors can offer advice and support.
Are you feeling the pinch more than your kids or grandkids? Have you noticed your weekly shop or medical bills creeping up? Or maybe you’ve found a clever way to stretch your pension further? We’d love to hear your stories, tips, and questions in the comments below.

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