Over the ten years to June 2026, consumer prices in Australia rose 35.6%. The cost of living rose by more than that for three of the four household types the ABS tracks: 40.1% for households relying mainly on government payments other than the age pension, 38.0% for employee households and 37.4% for age pensioner households. Self-funded retiree households saw the smallest rise, 34.6%, a little below the CPI. The route to those totals differed: employee households had the slowest rise in the first five years and the fastest in the second, as mortgage interest costs fell and then rose steeply.
The σ figure is APN’s certified reading for that condition. It measures the gap between annual growth in the ABS living cost index for pensioner and beneficiary households and annual growth in the CPI, which was +0.71 percentage points in the year to June 2026, against a long-run average of 0.05 points and a standard deviation of 0.46 points.
Four households, one basket of prices
The Consumer Price Index measures the change in prices paid for a fixed basket of goods and services by households as a whole. The ABS also publishes Selected Living Cost Indexes, which track the cost of living for households grouped by their main source of income: employee households, which rely mainly on wages and salaries; age pensioner households; other government transfer recipient households, which rely mainly on other government payments such as JobSeeker or the Disability Support Pension; and self-funded retiree households, which rely mainly on superannuation and investment income.
Two differences in construction matter for what follows. The living cost indexes measure what households actually pay out, so they include mortgage interest and consumer credit charges, which the CPI excludes. And they leave out the purchase of new homes, which the CPI includes. Each index weights prices by the spending pattern of its own household type, and the ABS updates those weights each year.
Ten years of rising costs
Set against a common starting point in the June quarter of 2016, the indexes for the three non-employee household types moved closely together until 2021, with the employee index below them; from mid-2022 that order reversed. By the June quarter of 2026 the cost of living had risen 40.1% for other government transfer recipient households, 38.0% for employee households, 37.4% for age pensioner households and 34.6% for self-funded retiree households. The quarterly CPI rose 35.6% over the same decade.
Living cost indexes by household type and CPI, index, June quarter 2016 = 100
Source: ABS Selected Living Cost Indexes, Australia, June quarter 2026, all groups index by household type; ABS Consumer Price Index, Australia, All groups, quarterly. Each series rebased to 100 in the June quarter 2016.
The gap to CPI over time
Measured as the difference between each index’s cumulative rise and the CPI’s, other government transfer recipient households finished the decade 4.5 percentage points ahead of consumer prices, employee households 2.4 points ahead and age pensioner households 1.8 points ahead. Self-funded retiree households finished 1.0 percentage points behind.
The employee line moved furthest. In the first five years, to June 2021, the employee index rose 6.5%, against 9.3% for the CPI and between 9.7% and 10.4% for the other three household types. The gap kept widening for another year, reaching −4.7 points in the June quarter of 2022. In the five years from June 2021 it rose 29.6%, the most of the four, against 24.1% for the CPI.
Cumulative change in each living cost index less cumulative change in CPI, since June quarter 2016, percentage points
Source: ABS Selected Living Cost Indexes, Australia, June quarter 2026; ABS Consumer Price Index, Australia, All groups, quarterly. Above zero, a household type’s costs have risen more than consumer prices since June 2016; below zero, less.
Mortgage interest and the employee index
Much of the employee index’s swing traces to mortgage interest charges. The living cost indexes count interest paid on home loans as a cost, and it makes up a larger share of spending for employee households than for other household types, so changes in lending rates move the employee index most. As the cash rate fell to 0.10% in 2020, the mortgage interest charges index for employee households fell from 58.0 in the June quarter of 2019 to 40.0 in the December quarter of 2021. The Reserve Bank then raised the cash rate thirteen times between May 2022 and November 2023, from 0.10% to 4.35%. The mortgage interest index rose 163.5% between the December quarter of 2021 and the March quarter of 2025.
Over those years the employee index rose faster than the CPI in every quarter from December 2022 to June 2025, measured as annual change, with the widest gap in the year to June 2023, when employee living costs rose 9.7% and the CPI 6.0%. Three cash rate reductions in 2025 brought the mortgage interest index down to 97.2 in the December quarter of 2025. Increases in February, March and May 2026 returned the cash rate to 4.35%, and the index rose 8.2% in the June quarter of 2026 alone, to 106.8.
Mortgage interest charges index, employee households, September quarter 2025 = 100
Source: ABS Selected Living Cost Indexes, Australia, June quarter 2026, mortgage interest charges, employee households. The index reflects interest charged on outstanding home loans, so it moves with lending rates and with the size of loans held.
Where prices rose most
Across expenditure groups, the ten-year pattern is broadly shared. Insurance and financial services, which include mortgage interest, rose by between 67% and 73%, more than housing for every household type. Housing costs rose by between 34% for other government transfer recipient households and 43% for age pensioner households; the housing group in these indexes covers rents, utilities, property rates and maintenance, and its mix differs by household type. The largest rise in any group was alcohol and tobacco for other government transfer recipient households, 126%. Communication costs fell for every household type.
A group’s price change is not the same as its effect on the total. How much a group moves an index depends also on how much of that household’s spending it takes, and those weights differ by household type and change each year. The table shows price changes only.
Change in living cost index by expenditure group and household type, June quarter 2016 to June quarter 2026, %
| Expenditure group | Employee | Age pensioner | Other government transfer recipient | Self-funded retiree |
|---|---|---|---|---|
| Housing | +36% | +43% | +34% | +41% |
| Insurance and financial services | +73% | +68% | +71% | +67% |
| Food and non-alcoholic beverages | +37% | +38% | +37% | +37% |
| Transport | +35% | +38% | +38% | +35% |
| Health | +44% | +42% | +35% | +42% |
| Education | +44% | +43% | +44% | +49% |
| Alcohol and tobacco | +74% | +78% | +126% | +55% |
| Recreation and culture | +23% | +29% | +22% | +27% |
| Furnishings, household equipment and services | +19% | +18% | +18% | +19% |
| Clothing and footwear | +7% | +4% | +2% | +6% |
| Communication | −12% | −9% | −13% | −9% |
| All groups | +38.0% | +37.4% | +40.1% | +34.6% |
Source: ABS Selected Living Cost Indexes, Australia, June quarter 2026, group indexes by household type. Changes calculated from index levels. Shading darkens with the size of the change: gold for rises, blue for falls.
The latest year
In the year to the June quarter of 2026, living costs rose 4.7% for age pensioner households, 4.6% for other government transfer recipient households, 3.8% for self-funded retiree households and 3.7% for employee households, against 3.9% for the quarterly CPI. Housing rose 10.8% for age pensioner households and 7.2% for employee households. APN’s reading of the June quarter by household type is set out in Where the Cost-of-Living Pressure Actually Sits, and the role of housing costs, as distinct from interest rates, in It’s Not Interest Rates.
Reading the decade
Over ten years the four household types ended within about five and a half percentage points of each other, and three of the four ran ahead of the CPI. The order changed along the way. Employee households gained from falling interest costs until 2021 and gave that advantage back, and more, as rates rose. Age pensioner households have seen their costs rise faster than consumer prices, measured as annual change, in every quarter since the September quarter of 2024. The indexes measure the cost of a household’s spending, not its income, so they show how prices have moved for each group, not whether its living standards have risen or fallen.
Findings are presented on the basis of data and evidence alone.
