A study into attitudes toward retirement savings conducted in the third quarter of 2023 has found a growing number of Australians are losing confidence in their ability to financially support their retirement years.
The State Street Global Advisors “Global Retirement Reality Report” showed 50 per cent of survey respondents who live in Australia ‘are not confident they will be able to retire when they plan to’. Additionally, 46 per cent stated they would not be financially prepared when they chose to stop working.
The results for the two survey questions showed a 10 per cent and 5 per cent increase respectively, compared to the 2022 report. Almost three quarters of (73 per cent) of respondents identified inflation and the cost of living as the primary factor contributing to a lack of confidence.
Mortgage debt and housing costs (38 per cent) and medical expenses (35 per cent) were also highlighted as significant factors.
The research indicated a majority of Australians (46 per cent) still prefer to have flexible access to their superannuation savings early in their retirement, before using their remaining funds to ensure a stable income in their later years.
State Street Global Advisors’ analysis of the results suggested the attitudes of superannuants were closely aligned with those of the government’s Retirement Income Covenant.
“In the debate over retirement incomes policy, there has been broad agreement on the principles [of the Retirement Income Convenant], but disagreement on the details. Our survey confirmed, yet again, broad support for the principles in the covenant,” the financial services firm said.
“The need for flexibility in early years balanced by security in later years is the model most favoured by respondents, which loosely reflects the principles of the covenant.
“However, plenty of respondents are attracted to alternate models, and so it is important that trustees keep member involvement at the centre of their retirement incomes strategy.”
To that end, the research found attitudes towards lifetime pensions is changing, with 16 per cent of respondents believing annuities represented poor value for money as compared to 29 per cent in 2022.
However, a significant number of respondents (44 per cent) admitted they didn’t know what an annuity pension was or how it worked.
The report was compiled from the results of a survey conducted by global analytics firm YouGov in August 2023. Responses from 4257 individuals were received covering Australia, the United States, the United Kingdom and Ireland.