“The upper deeming rate will decrease from 3.5 per cent to 3.25 per cent for balances over these amounts,” said Mr Morrison.

According to the government the lower rates will benefit more than 770,000 Australian part-pensioners and allowance recipients.

Mr Morrison said the cut in deeming rates shows the government “understands the pressures facing pensioners” and has a plan to support pensioners deal with rising costs of living and changing economic circumstances.

SMSF Association (SMSFA) director of technical and professional standards Graeme Colley said most pensioners with a reduced pension are impacted by the income test so the cut will mean a higher rate of pension from the government.

“They’re getting less from their investments [though], which is the offset for the other,” said Mr Colley.

Mr Colley said if pensioners are struggling at the moment, “the compensating increase in the age pension for the quarter-and-a-half drop in the interest rate won’t change things a great deal”.