The elderly population is facing significant challenges due to the recent reduction in bank interest rates on fixed deposits, which have dropped to just 7% or 8%. Wasantha Athukorala, Director of the Postgraduate Department of Humanities and Social Sciences at the University of Peradeniya and Professor of Economics, highlighted the severity of the issue.
Previously, individuals could earn an interest income of approximately Rs. 12,500 per month on a Rs. 1 million deposit at a 15% interest rate. However, with the rate now reduced to 8%, this monthly income has dwindled to around Rs. 6,500.
“This reduced income is far from sufficient to meet the monthly expenses of an individual,” Professor Athukorala explained.
As per data from the Department of Population and Statistics, the official poverty line for September 2024 is Rs. 16,073. In other words, a monthly income exceeding Rs. 16,100 is necessary for an individual to stay above the poverty threshold.
Given this, the reduction in interest income has left many elderly individuals—especially those reliant on fixed deposits—struggling to cover their basic needs. Among this group, a significant number are women, Professor Athukorala noted.
Sri Lanka has approximately 2.72 million people aged over 60, of whom 1.51 million (55%) are women, and 1.2 million (44%) are men. Around 1.2 million of these individuals have invested a portion of their pre-retirement earnings in fixed deposits and depend on the resulting monthly interest to sustain their livelihoods.
Reported by Premalal Wijerathne
