SELF-funded retirees say the latest interest rate cut is a disaster for them.
While most of the community yesterday welcomed the Reserve Bank’s 0.25 per cent cut, the Albury-Wodonga branch of the Association of Independent Retirees said it would make it harder for most of its members to make ends meet.
Former branch president Ken Curnow said rates had been cut in half in the recent years, slashing the income of those relying on investments and fixed-term deposits.
“It’s never entered anybody’s head in the past to worry about people relying on investment income — we just keep on retracting,” he said.
“The idea of superannuation is to make people independent of government support.
“This will affect every age group in future, when there’s no stability or provisions to prepare for retirement.”
Committee member, Louise Stringer said “the only people the cut benefits are families and small businesses”.
For Mrs Springer and her husband, who live in West Albury, said any cuts make them more conscious of their day-to-day spending.
Little luxuries are out and the big items that take a lifetime for many to afford, like overseas holidays, are on the backburner.
Mrs Stringer said the effect on individual retirees depended on whether they owned shares or had other investments as well.
Their entitlement to a part-pension was also an important factor.
“It’s a big spectrum. Not all have a lot of shares that can make up for the money they lose when the fixed-term rate goes down,” she said.
“Most don’t get any subsidies from the government.
“And they don’t always get things like a health care card.”
Mr Curnow said more cuts could put more stress on government finances as more people became eligible for a part pension.