Most Australians believe the age pension represents at least half of what they would need to live on in retirement.
Less than 6% of Australians say the age pension of about $24,100 p.a. for singles and $36,300 p.a. for couples would be sufficient, according to new research from the Association of Superannuation Funds of Australia (ASFA).
The survey of 1000 Australians by CoreLogic on behalf of ASFA found more than 80% wanted at least $43,300 a year for singles and $61,000 for couples (the ASFA comfortable standards budget) in retirement.
And they are prepared to pay for it.
Four out of five supported raising mandatory Super Guarantee (SG) contributions from 9.5% to 12% a year.
Older respondents were more likely to strongly support the increase in contributions, while support was lower among self-managed super fund members.
Australians have missed out on $38 billion since employer contributions were frozen in 2015.
An Australian earning the national average income of $62,000 would be more than $70,000 worse off at retirement, according to modelling from Industry Super Australia with data from ASFA.
“Every Australian deserves the right to a financially secure retirement, and keeping the freeze on the super guarantee will only make that harder,” ISA chief executive Bernie Dean.
Treasurer Josh Frydenberg said he would consult with the new cabinet and Treasury to review the current superannuation system after the Productivity Commission handed down a 722-page report on the sector in January.
The review is expected to take place before legislated changes to super, which would increase SG contributions by 0.5% a year each year from July 2021, come into effect.
ASFA chief executive Dr Martin Fahy said the nation’s compulsory superannuation system is one of the great successes of public policy in Australia.
“Australians deserve to enjoy their retirement,” he said.
“To achieve that they will need compulsory superannuation so they have the capacity to spend well above what the age pension provides for retirees.”