COVID-19 is creating a ‘financially forgotten’ generation

By Grace Ormsby

July 20 2020
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Older Australians are feeling “financially forgotten” by the government during the COVID-19 crisis.

A new report from National Seniors Australia, COVID-19: Older Australians’ life and care during the pandemic, has collated responses from older Australians who are grappling with the impact of the coronavirus on their daily life to highlight the financial situation many older Australians are now finding themselves in.

It invited its members to share their experiences of the crisis, both to make the specific needs and perspectives of older Australians visible to the government and to inform the policy agenda on ageing.

According to analysis of respondent responses, “the economic impact of the COVID-19 crisis on retirement income emerged early in the survey period as a dominant issue for seniors”, while everyday living stress was very much compounded when cash interest rates dropped to the record-low 0.25 of a percentage point as an early response to the pandemic.

The impact of the collapsing sharemarket on superannuation was highlighted as a major issue for many respondents, with 20 per cent indicating they are now feeling financial stress as a result of COVID-19.

Many of those people pointed out that they are now worried about their future ability to support themselves.

National Seniors Australia also flagged “a strong sentiment that the serious plight of many self-funded retirees had been completely overlooked by the government”.

Highlighting this point, the report referenced the comments of this self-funded retiree: “This group don’t get government pensions, discounts off rates or utilities, healthcare cards etc. or any of the financial stimulus measures announced to date, but their fund balances have been slashed and financial strength dramatically hit.

“This group seems to have been forgotten in the current wave of support due to the worsening economy and get no recognition of their contribution to the economy by being self-sufficient.”

Another person queried the workings of the system: “We are self-funded retirees and rely totally on the rental income coming in, that is what we live on. Now the government has forced us not to evict our tenants for six months which we totally understand, but where does that leave us once they all stop paying rent? Where are we going to get money from in order to live — the rentals are all we have. We feel as if the government has totally forgotten about us seniors that are not entitled to pension or anything else.”

Yet another considered that, “once again, the government is throwing money at everyone EXCEPT the self-funded retirees”.

“Food and energy costs are increasing, the value of our super funds has fallen dramatically and they don’t even mention us,” the respondent said.

The lack of support has led to many older Australians having “expressed disappointment and disillusionment that their hard work, contribution and self-sufficiency appeared to be so undervalued”, according to National Seniors Australia.

One such comment provided for the report said the following: “As a self-funded retiree, I need to halve my super withdrawals so as not to deplete my nest egg; otherwise, I will need to draw on the pension later.

“However, that means that my income will nearly halve, and I will have to survive on less than $18,000 for the year. Yet no payments are made to people like me as I do not draw on anything from Centrelink or any other welfare. Seems people like me are simply hung out to dry. Always feel we battlers who have done without and saved for retirement are left out of government policies.”

Even those who are in receipt of the age pension took issue with being overlooked, noting the “relatively generous ongoing JobSeeker and JobKeeper payments compared to pension payments”.

Not only are older Australians feeling the financial brunt of the pandemic, but “being forgotten or overlooked as an older person during the crisis was a theme evident across many areas of life”, the report went on to consider.

There are a number of financial risks facing self-funded retirees at the moment. Here are the four biggest ones to be aware of.

nestegg has recently highlighted why retirees and soon-to-be retirees need to reassess their finances right now.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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Retirement