More consumer education is needed to equip people with knowledge of the methods and products they can use to achieve better retirement income results.
A senior income stream expert has recognised the significant amount of consumer education still required in order to improve outcomes regarding retirement income solutions.
Challenger head of retirement income research Aaron Minney used a recent finding from a study on the subject of retirement to support his claim.
“The scary stat for me, and this is a stat from UNSW research that looked at pre-retirees’ awareness of lifetime income streams or why people do or do not choose a lifetime income stream, and they struggled with their research because their first [finding] told them 57 per cent of people did not know [these products] existed,” Minney noted during a media briefing held in Sydney today.
“It’s the reason why the number one ask in our Treasury consultation was better education to increase awareness. That was the number one item on [Treasurer] Jim Chalmers’ [recent] release.”
Although he called for an increased level of education around retirement income products, he acknowledged certain signs are showing the situation is improving.
“Things are coming together. People are thinking about retirement, [recognising] I’ve got my age pension, I’ve got my super [and] I’ve got my other income [so] how do I put those components together to get a better result,” he noted.
According to Minney, this progress has resulted from the work industry groups have done with regard to options such as model portfolios.
He pointed out government involvement, such as the Retirement Income Covenant, is welcome, but needs to have clearer focus on some of the more important issues to assist consumers in this phase of their lives.
“The thing with the covenant is we need to make sure the objective is clear and people have got the advice they need, whether that be the fully fledged comprehensive advice or something that’s scaled or targeted along this new-class-of-adviser approach, so people understand how to solve the problem they’ve got,” he suggested.
