But the group argued that the rate is still too high and “well above the typical return on what pensioners actually receive”.

Ian Henschke, National Seniors’ chief advocate, weighed in, highlighting that “the government is still deeming pensioners to be earning 2.5 per cent on investments in excess of $51,800”.

“No bank is offering anywhere near 2.5 per cent on their term deposits,” he commented.

“In fact, the Commonwealth Bank has a ‘special offer’ of 1.2 per cent on its term deposit, not even half of what the government deems is the return.”

Mr Henschke said the higher the deeming rate, the less money pensioners get.

Citing comments from Peter Costello around the deeming rate, the chief advocate said: “When Mr Costello says the current rate is pushing pensioners into riskier investments, you know we have a problem.”

He said this won’t change as a result of last week’s cut to deeming rates, “because the deeming rate still acts as a disincentive for pensioners to put their savings into safe investment accounts in banks, which come with a government-backed guarantee”.

“And the current state of the sharemarket shows just how risky the investment environment outside of term deposits really is.”