Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

Retirement

Age pension to remain but doubts loom over super increase

  • March 01 2021
  • Share

Retirement

Age pension to remain but doubts loom over super increase

By Cameron Micallef
March 01 2021

Treasurer Josh Frydenberg has given the clearest sign yet that the government may freeze the currently legislated superannuation boost, but declared fears of the pension being phased out are “unfounded”.

Age pension super increase

Age pension to remain but doubts loom over super increase

author image
  • March 01 2021
  • Share

Treasurer Josh Frydenberg has given the clearest sign yet that the government may freeze the currently legislated superannuation boost, but declared fears of the pension being phased out are “unfounded”.

Age pension super increase

In a speech made to the national press club on Friday, 26 February, Mr Frydenberg pointed to research in the Retirement Income Review, which showed that 9.5 per cent superannuation was enough to provide an adequate standard of living in retirement. 

“This is why, as the Prime Minister and I have said, we must rightfully and carefully consider the implications of the legislated increase to the superannuation guarantee before the 1st of July this year. This is even more important as we are in a time when our economy is recovering from the largest economic shock since the Great Depression,” Mr Frydenberg said. 

Mr Frydenberg said that if people used their assets efficiently, the current 9.5 per cent rate could achieve “adequate retirement incomes” when combined with the Age Pension.

Advertisement
Advertisement

The Treasurer also addressed fears that the pension system would be phased out by the time younger Australians reach retirement due to an ageing population.

“Clearly, we must do more to reassure all Australians that this concern is unfounded. The review’s findings could not be clearer. The Age Pension is well targeted and sustainable and will remain a key pillar of our system for generations to come,” the Treasurer said.

He also spoke of the trade-off between having an adequate lifestyle during a person’s working life and in retirement.

The RIR found that there is a trade-off between wages and superannuation, with a median earner approximately $32,000 worse off over the course of their working life. The Morrison government has, however, shied away from using the findings to freeze the increase.

Mr Frydenberg said he would “remain sceptical of those who, in the pursuit of their own interest, seek to restrict the legitimate choices Australians should have to save for their retirement”.

“It is simply not true, as some would have us believe, that there is not a limit to how high the superannuation guarantee can be increased in the name of delivering even higher retirement incomes,” Mr Frydenberg said.

“For some, there isn’t a problem that cannot be solved through higher rates of contribution to superannuation. These myths do not help Australians plan for retirement, or feel more confident and more secure in their retirement.” 

Age pension to remain but doubts loom over super increase
Age pension super increase
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article

About the author

author image

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

author image
Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

more on this topic

more on this topic

From the web

Recommended by Spike Native Network

More articles

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.