Retirees are in for a tough Christmas with the Reserve Bank taking official interest rates to their lowest level since the 2009 global financial crisis.
The Reserve Bank cut the official cash rate from 3.25 per cent to 3 per cent on Tuesday afternoon.
This interest rate cut, the fourth in 2012, isn’t good news for everyone.
The cut comes as a blow to retirees who depend on their bank deposit returns for a small steady income.
For many retirees readying to buy presents for the grandkids, the Reserve Bank will be the Grinch who stole Christmas.
Perhaps they should also be asking where the government is in all of this.
The impact of interest rate movements on retirees is usually offset by regular adjustments to the Centrelink deeming rates upon which pensions are calculated.
However, the deeming rates haven’t moved since March 2010.
Calls to adjust deeming rates have been met with silence.
With interest rates on a downward slide, it’s time for the federal government to step up and adjust the deeming rates.