Spending the inheritance: Boomers splurge on dining, travel as young people cut back on essentials

“Insurance, medical and utilities are some of the really key categories for older people, and they have seen significant rises in them,” Tubman said.

People aged over 65 increased spending on insurance by 10 per cent, while spending on utilities was up 4 per cent, and they also increased their grocery spend by 5 per cent.

Older Australians have also significantly increased their spending on dining out (up 7 per cent) and travel (up 10 per cent); Tubman said it was the second year of seeing significant spending increases in those categories for over 65s.

“Some of the older generation aren’t facing those same pressures that younger people are facing, and so despite the fact they may or may not like the fact that those costs have gone up, they have the means to lean into them,” he said.

Tubman said the data aligned with the Commonwealth Bank’s recent household spending insights, which found that renters, who are typically younger Australians, had only increased their spending by 1.3 per cent over the year to April, while those with mortgages increased their annual spend by 4.5 per cent and households who owned their homes outright increased spending by 6.3 per cent.

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Separate figures from the Australian Bureau of Statistics showed older Australians were continuing to return to work after retiring, but a decreasing proportion did so to help make ends meet.

About 162,000 people rejoined the workforce in 2022-23 after retiring. KPMG urban economist Terry Rawnsley said the proportion of retirees picking up work again for financial reasons was easing, from 32 per cent in 2019-20 to 29 per cent in the current year.

“This decrease hints at an improving financial landscape for retirees and a shift in motivations for re-entering the labour market,” he said.

“We are seeing a growing inclination among retirees to return to work out of a desire for engagement and opportunity.”

Overall, Australians increased spending by 2.5 per cent in the first three months of this year compared with the same period last year, while inflation rose by 3.6 per cent.

But Tubman said these shifts in spending were easing, and after a few years of sustained cost-of-living pressure households appeared to be resetting their wallets.

“What we’re starting to see is that consumers have made those changes over the last 12 to 18 months, and we’re at a new norm now,” he said.

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