Rate cut bad news for retirees

Retirees living off interest-bearing investments will be the biggest losers from this week’s decision to cut official interest rates.

The Reserve Bank of Australia slashed rates by 25 basis points on Tuesday.

Retirees who live off the interest generated by term deposits and other investments, and who are no longer dependent upon employment income, will be affected by the cut.

Michael O'Neill says over 50s who have paid off their mortgages will lose out with lower returns.

“While it’s good news for families with mortgages and retailers, it’s not so good for retirees who depend on that source of income,’’ he said.

“A combination of rising living costs and falling interest rates will leave many retirees feeling the pinch.”

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