This seems to, at least in part, originate from a 2012 Treasury paper, with claims 80% of the population who are eligible will be claiming the pension in the 2050s.
Statistically, however, the number of people relying on the age pension, in whole or in part, has been steadily declining since the 90s. Projections from the Association of Superannuation Funds of Australia shows that as few as 60% of retirees will need to access the pension in 2055.
|The Age Pension and those aged 65 and over: then, now and in the future|
|1997||80 per cent on the Age Pension or equivalent, 67 per cent of those on the full Age Pension|
|2017||70 per cent on the Age Pension, 60 per cent of those on the full Age Pension|
|2055||60 per cent on the Age Pension, only 40 per cent of those on the full Age Pension|
The data shows a clear downwards trend in any age pension reliance, down from 80% in 1997 to 70% in 2017, and a decline from 67% to 60% of people receiving the full age pension. This is attributable to the increase in super balances across the population as people retiring now have had an extra 20 years of compulsory super to grow their savings, compared to just 5 years for retirees in ’97.
Another contributing factor is that more people are continuing to work past retirement age now, with 13% of Australians aged over 65 continuing to work in 2016, compared to just 8% in 2006, according to the Australian Institute of Health and Welfare. We’re also seeing younger generations planning to be working for longer than their parents, which will also help to reduce the reliance on the age pension.
But this doesn’t mean that you can be complacent. Ensuring you have enough super to retire comfortably on isn’t impossible but it does take a bit of work. Work out how much super you will need and look at ways to boost your super account. You can also compare superannuation funds with Canstar to find the best one for you.
If you’re comparing Superannuation funds, the comparison table below displays some of the products currently available on Canstar’s database for Australians aged 30-39 with a balance of up to $55,000, sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Use Canstar’s superannuation comparison selector to view a wider range of super funds.
Fee, performance and asset allocation information shown in the table above have been determined according to the investment profile in the Canstar Superannuation Star Ratings methodology that matches the age group you selected.
To view the past performance of all super funds, rated by Canstar, use our comparison tool: