Superannuation starting to replace age pension

retirees bike shutterstockMore Australians plan to live on their superannuation savings rather than the age pension.

When the Australian Bureau of Statistics surveyed 3.8 million workers on their plans for retirement, it found 53% of the group – all people aged over 45 years – expected their main source of retirement income to be super, an annuity or an allocated pension.

Only 19% of those who have actually retired tapped superannuation as their main source of income.

About 95% of the intending retirees said they had contributed to a super scheme, compared with 64% of people who have already retired, showing the generational change from relying on the age pension towards living on superannuation savings.

About 57% of men intending to retire expected to live mainly off their super, compared with 49% of women. This isn’t surprising given women’s fragmented work patterns and generally lower wages. Women have less time to build up their superannuation balance and will receive lower employer contributions, since these are calculated as a percentage of wages.

Only 3% of men expected to live off a partner’s income, compared with 13% of women.

It should be noted this study asked about main source of income, so retirees for whom superannuation provides most of their income may still qualify for a part pension.

* Data from ABS 6238.0 – Retirement and Retirement Intentions, Australia, July 2014 to June 2015

April 2016