Grey Power members. Photo / Mark Mitchell
Yesterday's cut in the Reserve Bank's interest rate means many elderly New Zealanders will have to live on less, says Grey Power vice-president Bob Buchanan.
He said many had money invested with banks, and relied on the interest to pay their living expenses.
A lower official cash rate
would mean they received less on their investments.
Grey Power superannuation spokesman Ian Anderson yesterday told National Radio that elderly investors had been affected by a "double whammy" of financial hits.
The cash rate cut followed a financial industry collapse, which had cost many older people their entire retirement schemes.
Now, they were suffering a loss on safe investments as well.
But Mr Buchanan said some of the organisation's 90,000 members were nearing retirement age and still had mortgages, so yesterday's cut would "help some, but not others".
The elderly - who often relied on bank investments - wanted a retirement that was "not too volatile", and a rollercoaster Reserve Bank rate would not help in that respect, he said.
"When investing in your old age, you want to know what's going on."
But there were positives in the rate cut, particularly when combined with reduced petrol and food prices.
Mr Buchanan was philosophical about the Reserve Bank cut, saying older investors had enjoyed high interest rates for some time.
"It's part of the ups and downs over the past 10 years. They have been riding high ... this is a down part of the cycle."
He believed interest rates would bottom out in the next six months, and start rising again late next year.
