New research: Pensioners cutting back on the basics

Results of the Retirement Expenditure Survey (Fin Ed Centre, Massey University ) revealing what older people are spending on and how much may come as a shock to some but not Age Concern.

“We know that most older people are trying to live on the pension and a little extra,” said Ann Martin, CEO of Age Concern New Zealand.

“Those who have to live on the pension only, can really struggle to make ends meet.”

Age Concern is of the view that $348 per week (New Zealand Super) is not enough to buy the basics: electricity, telephone, rates, food, non-food e.g. shoes, soap, transport, cultural and medical costs. (It is acknowledged that savings can be made with Community Services Card, and someone on NZ Superannuation can get an accommodation supplement to help with the costs of renting, boarding or owning their own home, if their income and cash assets are less than a certain amount.)

Older people in this group are particularly vulnerable to hardship, especially if their health costs are high and / or they are faced with unexpected one-off expenses like a house repair, a trip to the dentist, a new pair of glasses, or an airfare to get to a tangi. These are the kinds of expenses that can tip people from hardship into poverty.

“What happens is the pensioner cuts back on these necessities. They don’t turn heating on, some reduce their grocery spend. Buckets end up being a long term fix for a leaking roof. They pull back on social activities, medications and doctor visits. Unfortunately this often leads to their having greater susceptibility to illness, hospitalisation and rest home admission, Martin says, and this in turn may be a significant cost to Government.”

In Otago it could be argued that some costs such as median house prices are lower. However our cooler southern climate means that regular heating costs will be greater. It is well documented that housing stock in Dunedin is generally older and colder, an issue that Dunedin City Council is currently grappling with. Keeping warm is a significant cost and failure to maintain this basic necessity results in a host of compounding wellbeing issues.

Government has been advised by Age Concern that what is needed is: a pension which meets the cost of the basics, more regular CPI adjustments and a community services card with scope to reduce the cost of electricity / gas; general dental care, eye care and visits to GPs for holders aged 65+.

Source: Age Concern via Community Scoop