The shape of lifetime income streams looked extremely different to how they did 24 months ago, he said.

Some 80 per cent said they were already concerned about inflation’s impact and 90 per cent said they were concerned what impact it would have on their finances over the next 12 months. 

Only 5 per cent of respondents to the Challenger survey said they were unconcerned by inflation and Lowe speculated these people were likely on a defined benefit scheme or receiving the highest rate of Age Pension. 

The top concerns of retirees were the impact of CPI inflation, the cost of living crisis and capital preservation. After concerns about the impact on essential spending such as groceries and energy, retirees were concerned about the cost of holidays as people looked to travel again after the restrictions during the COVID-19 pandemic. 

This was feeding into fears about running out of money, an issue exacerbated by the fact that people tended to underestimate how long they would live. 

“Australians get their life expectancy very wrong, they tend to underestimate by five years so this is problematic if they are already concerned about running out of money. 

“Around two-thirds of retirees said they were concerned about running out of money and, of those two-thirds, 80 per cent said they were ‘somewhat’ or ‘extremely’ concerned.

“People expect to reduce their spending as they get older and they do reduce their discretionary spending such as travel but they find they have to spend on other areas such as health which becomes more dominant in their spending.”