‘Confidence is key’: Aussies feel cost of living pinch

Older Aussies say their biggest fear is running out of money in retirement, as cost of living continues to put pressures on household budgets.

Older Aussies are feeling less confident about their retirement as rising costs and falling share prices fuel fears of a recession.

Survey data released by Challenger and YouGov showed Aussies over 60 who are yet to retire are feeling the squeeze with rising living costs and a lack of financial certainty clouding their outlook.

Challenger chief executive customer Mandy Mannix said retirement can be one of the most rewarding stages in Australians’ lives, but “confidence is key”.

Older Australians say rising cost of living is putting pressure on their retirement. Picture: NewsWire / Nicholas Eagar

“When people feel uncertain about their finances, they tend to hold back. That’s led to a chronic underspending problem in retirement, with many Australians living more cautiously than they need to.”

According to Challenger’s results, 3 in 4 pre-retirees now saying rising cost of living has affected their financial security.

A further 2 in 5 Australians say they rank running out of money is their biggest concern in retirement, while 3 in 10 are now extremely or very worried about outliving their retirement.

These numbers rise for women and those without an adviser, while 1.2 million Aussies are estimated to not even know where to start.

Adding to the pressures consumers are feeling is a volatile share market on the back of US President Donald Trump’s tariff, with experts fearing it could lead to a global recession.

Separate data from Westpac- Melbourne Institute showed Australia’s consumer confidence tumbled in April to a six-month low as Mr Trump’s global tariff policy sank the stock market, hitting household sentiment hard.

Australian consumer confidence has fallen since the announcement of global tariffs. Picture: NewsWire/ Gaye Gerard

Westpac head of Australia macro-forecasting Matthew Hassan said confidence waned due to the sudden falls on the ASX 200 and the US S & P 500, which were down 10 and 16 per cent respectively when the survey was conducted.

The ASX subsequently fell 4 per cent on last Monday, which was in line with the start of Covid, the 2008 global financial crisis and 1987 recession, before rallying by the end of the week.

“What we noticed when we saw the weakness around family finances was particularly the older age groups. If you’re near retirement or in retirement the fall in markets is a pretty big deal for your superannuation holdings, which will impact day-to-day spending,” he said.

“The fall in markets and the fall in the Aussie dollar is often read as a warning signal that gets consumers alert,” he said.

Mr Hassan said while much of Australia’s wealth is tied up in the family home, there are still segments feeling the pinch through their superannuation and direct share holdings.

Ms Mannix said retirement confidence isn’t just peace of mind — it’s quality of life.

“Ask a happy retiree what brings them joy, and they won’t just talk about their super balance. They’ll talk about the coffee catch-ups, the morning walks, and the holidays they have planned to visit family or see the world,” she said.

“We know retirement can be one of the most rewarding stages of life — but confidence is key,” Ms Mannix said.

“When people feel uncertain about their finances, they tend to hold back. That’s led to a chronic underspending problem in retirement, with many Australians living more cautiously than they need to.”

Originally published as ‘Confidence is key’: Aussies feel cost of living pinch