Fear of running out of money continues to be one of the key concerns for many people approaching and in retirement, research reveals.

A report commissioned last year by National Seniors Australia, titled Retirement income worry: Who worries and why?, underlines that while spending needs are generally higher in the early stages of retirement most retirees tend to spend less during this period and save for later, concerned they will outlive their savings.

As a result, many people end up leaving behind significant balances they could have used in their retirement.

To offer Australians more certainty for the future, QSuper – one of Australia’s largest and oldest superannuation funds – has created Lifetime Pension, an industry-first retirement product offering tax-free, fortnightly payments that never run out.

Confidence your retirement savings will last

QSuper’s Head of Product and Services Ben Hillier says the Lifetime Pension was developed in response to members’ needs.

“The thing that really piqued my curiosity early on was doing some analysis and finding out how much money super fund members were leaving on the table when they passed away,” Hillier says.

“It was realising just how many people took the minimum from account-based pensions and were then leaving quite substantial balances, close to 100 per cent of their starting balance.”

He says this is because many people are afraid of running out of money and live on less than they need to.

“An example is that at QSuper about half of our eligible members take the minimum payments for super income streams,” he says. “Of those, about 75 per cent took reduced minimums when temporary reduction in drawdown rates were offered by the Australian government during the global financial crisis and more recently in response to Covid-19.”

QSuper developed the Lifetime Pension with its main aim being to pay people a higher income with less risk.

“It’s for people to have the confidence to actually spend the amount of money they need and feel comfortable that their money is not going to run out,” Hillier says.

How the Lifetime Pension works

The pioneering product, which has already won the Chant West Innovation award, aims to maximise retirees’ cashflow by converting their retirement savings into tax-free, fortnightly income, no matter how long they live.

Launched in March 2021, it is hoped that many retirees purchasing this product will also be eligible to receive a more from the Age Pension, as only 60 per cent of the Lifetime Pension is counted in asset and income tests.

Key features

• Income for the rest of life
  Once a person starts a Lifetime Pension, ongoing payments will be automatically made into their bank account for the rest of their life.
• Age Pension benefits
  Only part of the Lifetime Pension (60%) is counted in asset and income tests, which may potentially increase a person’s Age Pension benefits, if eligible.
• Spouse protection option
  If a person chooses this option, payments will continue to be paid to their spouse for the rest of their spouse’s life, even if the Lifetime Pension purchaser passes away.
• Money-back protection
  If a Lifetime Pension purchaser passes away before receiving income payments equal to their original purchase price, the difference is payable as a death benefit to their beneficiaries or estate.¹
• Cooling-off period A six-month cooling-off period gives people time to decide whether the Lifetime Pension is right for them. After that, it is a permanent purchase.

Learn more

QSuper, formerly the Queensland public sector fund, is open to all Australians and the Lifetime Pension is available to QSuper members aged between 60 and 80.

For more information on QSuper’s Lifetime Pension visit qsuper.com.au/lifetimepension or call 1300 360 750.

¹Subject to the government’s Capital Access Schedule regulations. More details in the Product Disclosure Statement for Income Account and Lifetime Pension available on the QSuper website.