Aaron Minney (left) & Andrew Lowe.

The number of retirees worried about inflation has suddenly – and quickly – increased, according to research from Challenger.

Challenger head of retirement income Aaron Minney said on a recent webinar that the investment management company surveys national seniors every year. They ask them what they are worried about and what is making a difference to them.

“What we’ve seen this year, and it’s the first time we’ve seen it since we started running the surveys back to 2013, that the inflation number has all of a sudden had a much bigger increase in those that think it’s very important,” he said.

“By and large, wages have kept up with inflation, but when you are retired and you no longer have a wage, you start to wonder, well, how on earth do I get my increase? What’s going to go up for me to offset the costs of living? That’s why they’re worried.”

Minney added that they would have to cut back or sacrifice parts of their lifestyle, things they have worked hard for.

The main thing people can do to prevent that from happening, he said, is to develop decent investment solutions.

Impacts of inflation on retirement lifestyles today are real

The impacts of inflation on the lifestyle of retirees today are very real, according to Challenger head of technical services Andrew Lowe.

He said only 20 per cent of the Australian retirees Challenger surveyed said they were unaffected by the cost-of-living increases.

“When we asked them to look forward into the next 12-month period, only 10 per cent believe that they would be unimpacted at the conclusion of that 12-month period,” Lowe said.

Additionally, over 60 per cent of respondents answered that they were looking to cut back spending in certain areas, such as food and energy.

“All this says to me that the impact is real, that clients are acting in response to that,” Lowe said.

Andrew Lowe explained  that, according to the ASFA retirement standard, retired couples aged 65 to 84 needed $64,771 to have a comfortable lifestyle in 2021.

Twelve months later, the ASFA retirement standard states that retirees need $69,1000 – a $4,329 increase – to fund the same comfortable lifestyle.