Retirement Essentials

Age Pension increases on 20 March 2025

Age Pension increases on 20 March 2025

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A few weeks before 20 March and September, the team at Retirement Essentials is usually able to predict (within a few cents) the expected Age Pension indexation change. This indexation of the base rate occurs twice a year. The main Age Pension supplement is also adjusted (by CPI); occasionally the energy supplement is increased as well.

Last September’s increase of $26.54 per fortnight for singles ($41.17 for couples) was based upon increases from December 2023 to June 2024 when inflation was running higher at 3.8% per annum. What goes up will almost inevitably come down at some stage, and the annual rate of inflation has now eased to 2.4% for the 12-month period Jan-Dec 2024.

But Age Pension will still rise

The good news is that you can still expect a slight Age Pension base rate increase on 20 March, as two of the three main indicators upon which indexation is based – the Consumer Price Index (CPI) and the Pensioners and Beneficiaries Living Cost Index (PBLCI) – are still higher, albeit by less than one per cent.

The period used to calculate Age Pension indexation is the 6-month period between 30 June 30 and 31 December 2024. Across this time the CPI increased by 0.4 % and the PBLCI by 0.2%. (While the AWOTE is a third measure, it is often not relevant as the couples’ pension needs to fall below 25% of the current AWOTE for this to be relevant.)

What does this mean for fortnightly payments?

Here are our indicative estimates based upon the above increases, using CPI of 0.4% to adjust both the base rate and the pension supplement, as it is the higher of the two measures. (While possible, it is unlikely that the energy supplement will be changed from $14.10 as there is a separate energy rebate still in play. However, in an election year anything is possible.)

Are you ruled by your heart or your head?

Are you ruled by your heart or your head?

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Later this week some of us will drown our loved ones in attention, flowers, chocolates and positive messages.

Others will wonder why it’s so hard to get a booking at the local taverna on Friday night.

Yes, it’s Valentines Day on the 14th and a big day in many calendars.

Which led the team at Retirement Essentials to think about the two very distinct money personalities that we encounter on a daily basis; those ruled by their hearts – and those by their heads. Typical traits of the ‘heart-led’ members are:

they can be more concerned about the financial wellbeing of others than themselves, 

they are concerned their money may run out but this just stresses them rather than understanding that they need to take action, and 

they hope it will all work out, but don’t see a way to ensure that it does.

By contrast, those ruled by their heads tend to:

have more confidence in their ability to create and manage an income strategy

realise that the complexity of the Australian retirement income system requires a lot of knowledge of all pillars of income as well as the rules associated with super, Centrelink, property and tax, and

are often diligent about having an income plan but would like an objective review to ensure that they are on track.

You may think that being a rational ‘head not heart’ personality is ‘better’ for your retirement outcomes. But not necessarily. A problem can occur when a rational mind thinks it has a solution but due to complacency or over confidence, vital detail can be missed or misunderstood and solutions can go pear-shaped. Being open-minded is an important attribute when managing money and sometimes people who know less are more open to the right insights and assistance.

And this is why the advice team at Retirement Essentials has created a specific advice consultation  – the Retirement Health Check – for both romantics and rationalists who are entering or part-way through their retirement journey. Typically such people are seeking one or more of the following three things:

demonstration that they will be okay, that their money will last the distance,

reassurance that their understanding of their options is both complete and correct,

a stronger sense of control that their plan is appropriate as well as doable.

How Age Pension will increase in 2025

How Age Pension will increase in 2025

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What you need to know

As we head into a new year, there’s that wonderful sense of optimism and opportunity. This often means the chance to do things differently, to make the changes we believe might make our lives better, in whatever way matters most.

At Retirement Essentials we believe that our role is to ensure all our members are fully informed about the rules and options of retirement income. And that you know of any changes well in advance. Today we are concentrating on Age Pension updates – what might happen in 2025 and how you can anticipate any ways in which these changes might affect your own situation.

Age Pension increases 2025

The basic rate of the Age Pension is scheduled for review twice a year. Changes go live on March 20 and September 20 every year. This indexation is based upon changes to the Consumer Price Index, Pensioner Beneficiary Living Cost Index and the Male Total Average Weekly Earnings. By end February the data necessary to calculate a March indexation increase has usually been released. This means we are able to send a newsletter with projected changes in late February (or August), a confirmation of changes by March 15 (or September 15) and notice that our Age Pension Entitlement Calculator has been updated by March 20 (or September 20).

Income and Asset Test limits 2025

The limits for both parts of the means test are often changed on the same dates as indexation (March 20 and September 20). Additionally both limits can change again on 1 July. We inform our members by enewsletter of all such changes. It’s really important to keep your eye on these limits if you are ‘almost’ eligible. You can use the free Age Pension Entitlement Calculator at any time to ensure you are able to apply as soon as possible, thus mitigating the danger of a loss of potential benefits while your application is being processed.