Retirement
75% of Australians support SG increase
The majority of Australians want to see an increase in the superannuation guarantee to 12 per cent to ease the pressures of retirement, research has shown.
75% of Australians support SG increase
The majority of Australians want to see an increase in the superannuation guarantee to 12 per cent to ease the pressures of retirement, research has shown.
Survey data collated by the Association of Superannuation Funds of Australia (ASFA) found that only 12 per cent of individuals supported leaving the superannuation guarantee untouched at 9.5 per cent.
The gradual increase in the SG rate will begin from 1 July 2021 at a rate of half a percentage point each year until it reaches 12 per cent in 2025.
It also found that 75 per cent of respondents indicated that they would struggle to live on the age pension alone, and that only 30 per cent indicated that they could have a comfortable lifestyle in retirement spending less than $50,000 a year.
The research goes against some of the assumptions the Morrison government has made about the importance of wage growth during the pandemic.
While Liberal backbenchers argue that raising superannuation during a pandemic might be the wrong time, Industry Super points to 2014 when the Coalition stopped the rate increasing by 0.5 per cent a year to 12 per cent in 2019 in return for higher wages.
“It will certainly have a negative effect on wages growth,” Governor Lowe said in August.
“If this increase goes ahead, I would expect wage growth to be even lower than it otherwise would be. There will be an offset in terms of current income. Some people say that’s perfectly fine because people will have a higher future income… So, there’s a trade-off here. Do we want people to have the income now or do we want them to have it later on?”
But an Industry Super Australia analysis of 8,370 Enterprise Bargaining Agreements struck before and after the super rate was frozen shows the promised wages boost never materialised and workers were not compensated for their lost super.
“Its delay could cost the average full-time worker in their 30s $45,00 at retirement.”
Currently, the age pension is $24,551 a year for a single person and $37,000 a year for a couple.
According to ASFA, by lifting the SG to 12 per cent, it predicts half of all Australian retirees will be self-funded by 2050, which counters the pressure of an ageing population on generations of future taxpayers.
“Without question, Australians value their superannuation and they clearly support measures aimed at helping them to build the nest egg necessary to fund a dignified retirement in this country,” said ASFA chief executive Martin Fahy.
“With the legislated increase of the superannuation guarantee to 12 per cent, and as the superannuation system matures, we expect to see a greater proportion of retirees relying less on the age pension and more on their superannuation.”
1,375 Australians were surveyed in October about their views on superannuation, the age pension and their standard of living expectations for their retirement.
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