The ABS released its Selected Living Cost Indexes for the September quarter 2026 on 4 November 2026. They show employee households' living costs rose 5.1% over the year, compared with 4.3% for the headline CPI. For a working household spending $1,500 a week, that's about $76.50 more a week, or roughly $3,978 a year, for the same basket. Mortgage interest charges, up 5.7% in the quarter, were a big part of the jump. Below, you can find your household type and see your number.
What is the Living Cost Index, and why is it higher than CPI?
The CPI tracks prices across the whole economy. The Living Cost Indexes measure what particular household types actually pay out of pocket, and that includes mortgage interest charges, which the CPI leaves out. When the RBA raises rates and banks pass the rises on, households with a mortgage feel it in the living cost index before it shows up anywhere else.
The ABS says mortgage interest charges rose 5.7% in the September quarter, after an 8.2% rise in the June quarter, as banks passed on the RBA's May cash rate increase.1 Compounded, that's about 14.4% in six months. Meanwhile, the CPI rose 4.3% in the 12 months to September 2026, with electricity up 12.8% as Commonwealth rebates ended.2
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Your household type, your number
Annual living cost rises, September quarter 2026, from the ABS:1
To turn those percentages into dollars, we applied each household type's annual rise to three levels of weekly spending. These are illustrative examples: what the same basket would cost now compared with a year ago, assuming your spending pattern matches the ABS household type.
| Household type (annual rise) | $1,000/week | $1,500/week | $2,000/week |
|---|---|---|---|
| Employee (5.1%) | +$51 /wk $2,652/yr |
+$76.50 /wk $3,978/yr |
+$102 /wk $5,304/yr |
| Other govt transfer (4.9%) | +$49 /wk $2,548/yr |
+$73.50 /wk $3,822/yr |
+$98 /wk $5,096/yr |
| Age pensioner (4.3%) | +$43 /wk $2,236/yr |
+$64.50 /wk $3,354/yr |
+$86 /wk $4,472/yr |
| Self-funded retiree (3.8%) | +$38 /wk $1,976/yr |
+$57 /wk $2,964/yr |
+$76 /wk $3,952/yr |
Calculation: weekly spending × annual rise; yearly figure = weekly × 52. Illustrative only.
Which household type are you?
The ABS groups households by their main source of income. If wages are your household's main income, you're in the employee group. This is the group most likely to carry a mortgage, which is why it rose fastest. If the Age Pension is your main income, use the age pensioner row. If you mainly live on another payment, such as JobSeeker or Parenting Payment, use other government transfer recipients. If you're retired and live mainly on super or investments, use self-funded retiree.
Two quick adjustments make the table more personal. If you rent rather than pay a mortgage, your rise is probably closer to the CPI, because rents rose 3.6% over the year. If you have a large variable-rate loan, yours may well be above 5.1%.
The 0.8-point gap between the employee index and the CPI is worth about $624 a year on $1,500 a week. That's money the headline inflation figure doesn't show you.
Build your own living cost index
The ABS averages millions of households, so your own rise could be 3% or 9%. You'll only know if you can see your own numbers side by side, month after month.
- Track mortgage, insurance, transport and groceries in one place, so you can see which line is driving your rise.
- Compare this month with last month and with your plan, and watch the gap shrink as you adjust.
- Plan for each rate change by testing a higher repayment before it lands.
It's a 100% digital Google Sheets and Excel file, so nothing is shipped and there are no shipping fees. You can download it right after purchase and use it on your phone, tablet or computer. It's a one-time purchase.
Where the rise came from
For employee households, the biggest quarterly contributors were insurance and financial services (+4.4%, which includes mortgage interest), transport (+3.5%) and housing (+1.2%). Over the year, insurance and financial services rose 10.6%, housing 5.4% and transport 5.2%.1
Age pensioner households were hit hardest by transport (+3.7% in the quarter) and housing (+7.4% over the year). Health costs fell 1.4% for age pensioners in the quarter, which softened the total a little.1
What it means for the pension in March 2027
Age Pension and some other payments are indexed on 20 March and 20 September each year, using whichever is higher: the CPI or the PBLCI.3 The March 2027 rise will be based on the six months to December 2026, so today's figures are a guide, not the final number. Pensioners can see that the PBLCI (4.6%) is currently running above the CPI (4.3%).
What to watch next
These figures cover the quarter before the RBA's November rise, so the December quarter living cost figures will capture another round of higher repayments for borrowers. Electricity is the other line to watch. The CPI showed electricity up 12.8% over the year as rebates ended, and summer air-conditioning can push quarterly bills higher. If your household is already stretched, it makes sense to plan for the next rise now rather than react when the bill arrives. On the income side, our Wage Price Index September 2026 breakdown shows how far a typical pay rise is falling behind these costs. Our 4-week plan for summer electricity bills breaks that down by network area, with the Solar Sharer free hours. The monthly ABS spending data tells a similar story: household spending rose 6.8% in a year, with fuel spending up 5.4% as volumes fell.
Four moves this month
- Calculate your own rise. Compare this month's spending with the same month last year, category by category.
- Call your lender. After the RBA's November hike, ask for your new repayment and whether a lower rate is on offer. Moneysmart has a mortgage calculator and switching tips.4
- Re-quote your insurance. It's one of the fastest-rising lines for employees.
- Protect a buffer. Even one week of spending set aside makes the next rate rise less frightening.
Read more: what September's 4.3% CPI costs you, your repayment after the RBA's 4.85% hike, why 1 in 6 Australians can't last a week and 8 scripts to cut your electricity bill.
FAQ
What is the Living Cost Index in Australia for September 2026?
Annual rises range from 3.8% for self-funded retirees to 5.1% for employee households. The age pensioner index is 4.3% and the PBLCI is 4.6% (ABS, released 4 November 2026).
Why is living cost inflation higher than CPI for workers?
Because the living cost indexes include mortgage interest charges, which rose 5.7% in the quarter. The CPI excludes them.
Does the PBLCI decide the pension increase?
For the Age Pension, indexation uses whichever is higher of the CPI and the PBLCI, on 20 March and 20 September.
If rising costs are weighing on you, talking to someone you trust can help. The free National Debt Helpline (1800 007 007) offers financial counselling. This article is general information only.
Sources
- Australian Bureau of Statistics, Selected Living Cost Indexes, Australia, September 2026 (released 4 November 2026).
- Australian Bureau of Statistics, Consumer Price Index, Australia, September 2026 (released 28 October 2026).
- Department of Social Services, Social Security Guide 5.1.8.50: indexation of pensions.
- ASIC Moneysmart, Home loans.
- National Debt Helpline, ndh.org.au.
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Educational content only. Not personalised financial advice.