Pension worth is mystery to most
A Sunsuper survey has found that 88 per cent of Australians don’t know how much the age pension would provide them in retirement, even though one in three (34 per cent) believe they’ll be completely reliant on it.
The survey of more than 1500 Australians, conducted by Galaxy Research on behalf of Sunsuper, found that more than one quarter (28 per cent) believed they knew the value of the age pension, however less than half (43 per cent) of these people actually chose the correct amount when questioned.
Most respondents thought the maximum government age pension would provide them with significantly more in retirement, with nearly one in five (18 per cent) thinking it was double its actual value.
Sunsuper’s customer service general manager, Steven Travis, said these figures were alarming especially considering the number of Australians who will rely on the age pension in retirement.
‘‘It’s quite shocking when you consider that approximately 70 per cent of retirees receive at least a partial age pension and that most of these people don’t know how much the age pension is and what kind of lifestyle it would provide them in retirement,’’ said Mr Travis.
‘‘Most Australians dream of travelling around Australia or overseas and pursuing new hobbies in retirement. However, most people don’t realise that the current maximum age pension is $733 for singles and $1106 for couples per fortnight.
‘‘Based on Sunsuper’s lifestyle modelling if you were completely reliant on the age pension in retirement it would mean only eating out occasionally at budget food outlets, saving hard for one or two short breaks near home each year, relying on the public health care system and free benefits to cover medical costs and only participating in free or minimal-cost leisure activities.’’
The Sunsuper survey also found that more than 40 per cent of Australians were unaware that the age pension is based on an income and assets test, including one quarter of baby boomers (23 per cent).
Meanwhile, research by Deloitte has found that although today’s young workers will have about $1.1 million in their superannuation when they retire, on average, it will not be enough for a comfortable lifestyle.
This figure would last only to about the age of 75.