Households living mainly on superannuation and investment income have had the smallest rise in living costs of any household type the ABS tracks: 115.3% since 1998, and 22.5% since 2021, when the others rose between 25.2% and 29.6%. Much of the difference lies in what they spend their money on. Insurance and financial services, the group that includes interest charges, make up only 7.0% of their costs, against 18.4% for employee households, so the rise in interest rates from 2022 added much less to their costs. Since the September quarter of 2025, when mortgage interest charges fell below their level a year earlier, their living costs have risen faster than those of employee households.
The node reading measures pension and beneficiary households, not self-funded retirees; it is cited for context.
What the index measures
The ABS Selected Living Cost Indexes track the prices paid by different kinds of household, grouped by their main source of income. Self-funded retiree households are those whose main income is superannuation or investment income. Each index weights prices by what that household type actually spends, and unlike the Consumer Price Index it includes the interest paid on mortgages and consumer credit, and excludes the purchase of new homes.
The index measures costs only. It includes interest that households pay on borrowing; it does not include the interest they earn on deposits, or any other income. For self-funded retirees that matters: a rise in interest rates raises the small part of their costs that is borrowing, while any rise in the income from their savings is outside the index altogether. Nothing here says whether self-funded retirees are better or worse off, only how the prices of what they buy have moved.
Twenty-eight years of cost growth
| Household type | June 1998 to June 2026 | June 2021 to June 2026 | Year to June 2026 |
|---|---|---|---|
| Employee | +121.6% | +29.6% | +3.69% |
| Age pensioner | +127.2% | +25.2% | +4.72% |
| Other government transfer recipient | +135.8% | +26.9% | +4.63% |
| Self-funded retiree | +115.3% | +22.5% | +3.83% |
| Consumer Price Index | Shown from 2021 | +24.1% | +3.94% |
Change in the all-groups living cost index. The Consumer Price Index comparison is shown from 2021. Source: ABS, Selected Living Cost Indexes, Australia, June 2026; ABS, Consumer Price Index, Australia.
Over the long run the self-funded retiree index has risen least. From June 1998 to June 2026 it rose 115.3%, against 121.6% for employee households, 127.2% for age pensioner households and 135.8% for households relying on other government payments. Over the past five years the difference has been sharper: 22.5% against 29.6% for employee households and 24.1% for the CPI. The ten-year comparison across all four household types is set out in Employee Households and Pensioner Households: A Decade of Diverging Living Costs.
A different basket
What self-funded retiree households spend on: share of the living cost index, June quarter 2026
Per cent of the all-groups index, from the ABS points contributions, June quarter 2026. The note against each bar is the same share for employee households. Source: ABS, Selected Living Cost Indexes, Australia, June 2026, table 2.
The difference is in the basket. Recreation and culture, which includes travel and holidays, is the largest single part of the self-funded retiree index at 19.1%. Health is 12.6%, twice its share for employee households (6.3%). Insurance and financial services, which holds insurance as well as mortgage interest and consumer credit charges, is 7.0%, against 18.4% for employee households and 8.3% for age pensioner households. Housing costs are 11.7% of the index, a little below the employee share of 13.7%.
Through the rate cycle
Annual change in living costs, self-funded retiree and employee households
Per cent, change on the same quarter a year earlier, June quarter 2002 to June quarter 2026. Source: ABS, Selected Living Cost Indexes, Australia, June 2026, tables 1 and 2.
Because interest charges weigh so little in their costs, rising interest rates added much less to the self-funded retiree index than to the employee index. Their annual cost growth was below that of employee households in every one of the twelve quarters from September 2022 to June 2025; in the year to March 2024 it was 3.4% against 6.5%. The order has since reversed. In the employee index, mortgage interest charges had risen 91.7% in the year to June 2023; they were lower than a year earlier in the September and December quarters of 2025 and the March quarter of 2026, by up to 6.4%. Self-funded retiree costs have risen faster than employee costs in each of the four quarters from September 2025 to June 2026; the data shows these movements coinciding, not that one caused the other. That is not unusual over the long run: it has happened in 55 of the 109 quarters since 1999.
The year to June 2026
Self-funded retiree living costs by expenditure group, change over the year to June 2026
Per cent, June quarter 2026 on June quarter 2025. Source: ABS, Selected Living Cost Indexes, Australia, June 2026, table 2.
Over the year to June 2026, self-funded retiree living costs rose 3.83%. Housing costs rose fastest, 9.6%, followed by education (5.6%) and insurance and financial services (5.1%). Recreation and culture, the largest part of the basket, rose 2.5%, and furnishings and household equipment barely moved.
Annual change in living costs by household type, year to June 2026
Per cent, June quarter 2026 on June quarter 2025. Source: ABS, Selected Living Cost Indexes, Australia, June 2026; ABS, Consumer Price Index, Australia.
Across household types the year’s increases were close together. Age pensioner and other government transfer recipient households saw the largest rises, 4.72% and 4.63%; self-funded retirees (3.83%) and employee households (3.69%) the smallest, both a little below the CPI’s 3.94%.
The reading in context
Household Economic Cohort Analysis (21450) read +1.4232σ for the June quarter of 2026. It measures a different group, pensioner and beneficiary households: their living costs rose 0.71 percentage points faster than the CPI over the year, against an average gap of about 0.05 points since 2011. There is no equivalent reading for self-funded retirees.
What this does not show
The living cost indexes measure changes in the prices households pay. They do not measure income, savings, investment returns or wealth, and they cannot show whether any household type is better or worse off. They measure average price change for each household type, and costs for individual households will differ with what they buy. The spending shares shown are those of the index in the June quarter of 2026, after the annual reweighting.
Findings are presented on the basis of data and evidence alone.
