Since December 2018, only 45 per cent of older Australians accessed the pension and only 25 per cent of this age group were drawing a full aged pension, according to Challenger.
Jeremy Cooper and Aaron Minney, who co-wrote the report, said “super is reducing reliance on the Age Pension for the large majority of people entering retirement. The evidence for this is that the average newly retired Australian is not accessing the Age Pension at all”.
Challenger estimated that a typical Australian couple will have more than $400,000 in superannuation if they retired today, with 60 to 64-year-olds approaching retirement having in excess of $300,000.
The superannuation industry has shown that it is successful in building up savings for retirement due to success across multiple funds.
In total, large APRA funds had over 1.6 million members with a pension account, amounting to $457 billion in member benefits.
The majority of large APRA funds have an average retirement phase member balance above $258,500, which is the lower threshold for the assets test for the age pension. This means the majority of members do not get a full aged pension due to having adequate resources for retirement, according to the government.
Who still gets the pension?
The data from Challenger suggested that the system is working, as only 42 per cent of older Australians are now getting a full pension.
Australians who are above 80 years old are still strongly represented by pension numbers. Challenger suggests that 80 per cent of 80-year-old Australians are getting some form of the age pension.
As super balances continue to grow, most retirees can expect to spend longer in retirement before they receive any age pension.