Age Pensioners not spending the inheritance

Australia’s aged pensioners tend to preserve financial wealth and consume conservatively says a new study by the ARC Centre for Excellence in Population Ageing Research (CEPAR).


The CEPR report Age Pensioner Profiles: A Longitudinal Study of Income, Assets and Decumulation examines retirees’ income, assets and decumulation patterns which show older Australians generally live well within their means. The report drew on eight years of Centrelink data of over 10,000 pensioners whose retirement is funded either by a full or part age pension, with some extras from mandatory and voluntary superannuation balances and from private savings.


It describes how older households, who have accumulated during working life with the intention of funding consumption in retirement, in fact don’t fully access all their assets in old age. Instead they are holding on to their wealth potentially for bequests, as a precaution against uninsurable shocks, and/or unexpected expenditure and a longer lifetime.


Ramona Meyricke, an Associate Investigator with CEPAR said, “We call them ‘buffer stock savers’. To meet daily costs, they rely on the age pension and income from investments, and will avoid dipping into retirement savings which they keep to cover anticipated future health or care costs, and for bequests. They are very concerned about unforeseen expenses as they get older, and cautious about preserving assets for protection.


“Our research shows that Australian pensioners’ consumption is often conservative. Younger, wealthier pensioners tend to spend more and reduce their savings, but at later ages, most households carry on accumulating assets.”


The authors believe pensioners could have less anxiety about their financial future if they:

  • have a better estimate of any future medical and aged care costs

  • have access to financial products providing longevity, health and aged-care insurance.

This could improve their current welfare by reducing the need to retain assets they rarely - if at all – divest to support themselves in older age.


The full paper is available at:


Other CEPAR reports are available at


1 October 2015.