Pensioner inflation: Things could get worse before they get better

Pensioners are the first to suffer when the cost of living rises.

On a fixed income and with fewer employment options, pensioners don’t have many ways to make money.

Given the current state of the economy, will pensioners have enough money to survive 2027?

Calculating Pensioner Inflation

According to Statistics South Africa (Stats SA), pensioner inflation was 4.3% as of July 2026.

Individual expenses have increased by more than that.

Healthcare, for example, increased by 4.7% in July 2026 compared to July 2025.

In the Western Cape and Gauteng, health services increased by 5% and 4.9%, respectively.

Then, pensioners have to deal with transport costs.

Between July 2025 and July 2026, public transport is up 11.4%.

• Fuel is up 20.7%.
• Insurance is up 5.9%.
• Electricity is up 8.2%.

Some groceries are down, such as cereal products, processed foods, fruit and nuts, and vegetables.

But every other food category is up.

These are expenses pensioners can’t avoid.

The reality is that, next year, a pensioner’s basic expenses could rise by far more than pensioner inflation.

Pensioner Income Increases

Pensioners receiving an Older Person’s Grant can expect the National Treasury to increase the grant by 5%.

Those getting an annuity can expect a similar increase next year.

But basic expenses like medical costs, transportation, electricity, and accommodation will push real inflation for pensioners to 11.6%.

That means pensioners will be out of pocket by at least 6.6% going into next year.

Or they’ll have to join the thousands of other pensioners returning to work.

According to 10X’s 2024 Retirement Reality report, only 6% of retirees are very confident their retirement savings will last.

Medical Costs Could Increase

Pensioners on medical aid could also see their annual increases rise above inflation.

Younger South Africans are leaving medical aid schemes in droves.

These employed and healthier people typically subsidise the 23% of South Africans over 65 on medical aid.

But with fewer younger people to subsidise, pensioners have to carry the cost burden.

What Pensioners Need

To keep up with real inflation, old-age grant beneficiaries will need at least a R278.40 increase in 2027.

Those getting an annuity need their monthly payments to increase by 12%.

But that could put the millions of pensioners who get an annuity and an old-age grant at risk.

The current cut-off income is R9 350 a month for a single pensioner and R18 700 for married pensioners.

Pensioners worried about whether they’ll have enough money in 2027 should watch August’s Consumer Price Index (CPI) data.

This will give a clearer picture of what to expect next year.