Dire retirement? Most Aussies fear they won’t have enough money

Older Australians have long been crying out for an increase to the pension, but new research suggests those on the brink of retirement fear they won’t have enough to live on, with the majority of Australians supporting a substantial age pension increase.

The study by the Australian National University (ANU) surveyed almost 3,500 adults in early 2021, finding more than 70.5 per cent of adults think the current age pension of $944.30 per fortnight for a single person with no children isn’t enough. The pension has since received a minuscule boost of $8.40 a fortnight, bringing the new fortnightly figure to a maximum of $952.70.

Respondents were asked how much the pension should be, and came up with an average of $1,115 per fortnight. According to the survey, respondents across all age groups think the single Age Pension payment isn’t enough and 70 per cent agreed on the $1,115 figure. If the payment were increased to $1115 per fortnight it would bring the annual payment to $28,990 versus the current annual single full-pension payment (including all possible supplements) of $24,770.20, which would be a $4,220 a year increase.

The study found that well over half of people (55.7 per cent) who aren’t yet retired are worried they won’t have enough savings to live comfortably when they stop working — a huge jump from 39.6 per cent when the ANU did a similar survey in 2015. Professor Nicholas Biddle, associate director of the ANU Centre for Social Research and Methods, said the figure had increased significantly in recent years.

“In early 2021, as Australia was continuing to emerge from the Covid-recession, the majority of Australians who weren’t currently retired thought that they will not have enough money when they do,” he said. “Of those Australians who say they are worried about not having enough money in retirement in 2021, females, people who hadn’t finished year 12 and those living outside capital cities were most concerned.

“Our study shows a large increase since the last time we asked this question in 2015, when only 39.6 per cent of Australians thought they would not have enough money to live comfortably. But, we have seen a very large decline in the percentage of people who said they definitely would have enough money — 21.3 per cent in 2015 compared to just 6.1 per cent in 2021.”

The compulsory superannuation guarantee was also touched on in the study, with more than half of respondents (55 per cent) believing the guarantee should be increased from 9.5 per cent to 12 per cent by 2025 as legislated. Interestingly, just under a quarter said the rate should be more than 12 per cent.

Respondents were also asked if home ownership should affect whether a person receives the Age Pension and, if so, should this affect all homeowners or only those above a certain threshold. The responses clearly indicated an even split in Australians beliefs, with about 50 per cent voting that the primary residence should be included in the Age Pension assets test. Currently, your home is not counted as an asset when calculating pension or payment, but it does affect how your pension or payment is assessed under the assets test.

While it looks like most Aussies are feeling the stress, the good news from the survey is that those who had already retired seemed far less worried and more comfortable in their finances. The study found that more than 71 per cent of those who had already retired said they definitely, or probably, had enough money to live comfortably for the rest of their retirement.

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