Hands off savings: survey reveals strong opposition to changing retirement system

A new survey has revealed Australians don’t want further changes to the retirement system, despite an acceptance of growing costs to support our ageing population.

A new survey has revealed Australians don’t want further changes to the retirement system, despite an acceptance of growing costs to support our ageing population.

The results expose the difficult position politicians are in when it comes to addressing retirement issues.

The survey commissioned by Chartered Accountants Australia and New Zealand (CA ANZ) asked more than 1,200 residents for their thoughts on how to make the retirement system sustainable.

The strongest opposition was to across the board reductions in the amount paid.

Tony Negline, CA ANZ’s Superannuation Leader, said the Ageing Population: Do We Understand and Accept the Challenge? report showed politicians face difficult decisions with the community divided on how to improve the sustainability of the retirement system, despite a clear recognition that costs are increasing.

“The Australian public’s dominant preference is for the status quo to remain in place and that the government pension should be provided with current means testing rules in Australia,” Negline said.

“Australians are resistant to change, including the prospect of increasing taxes to fund the inevitable increase in costs.

“There was mixed support for increasing the age of entitlement, amending how adjustments occur by linking to prices rather than wages, or pre-funding through increased taxes.”

The survey compared attitudes to superannuation among both Australian and New Zealand residents, as governments in both countries prepare to deal with challenges presented by ageing populations.

“Our survey found half of Australians are ‘thinking somewhat’ about retirement planning and awareness of the Age Pension is high, at 92%.

“But there’s a real gap when it comes to knowledge about the level of payment and how the schemes are funded.

“Despite that, almost two-thirds of Australians know that with an ageing population the Age Pension will cost more in the future.”

In Australia, 41% of couples and 35% of singles feel they could ‘get by’ on Age Pension income levels. Only 12% of couples and 12% of singles feel they could ‘live comfortably’ at that level.

There was also a marked difference in attitudes between generations in terms of continuity of the scheme with 33% of younger Australians of the view that scheme will exist in its current form, compared to 77% for those aged over 65.

“It’s clear that older citizens suffer from reform fatigue and they are sick of the constant change,” said Negline.

“There’s a strong view against increases in the minimum pension age, protection of the family home from age pension asset tests, and that the Age Pension is an entitlement.

“The strongest opposition is to reductions in the amount paid across the board. The least unpopular was for use of income and asset testing to determine how much government should pay to Age Pension recipients.

“The clear finding from our survey is that we need more than public education to change this debate.

“The survey split respondents into two groups – one that received supplementary information and one that did not – but there was no real difference between the two.

“That points to the fact it’s extremely unlikely public education on population ageing will, on its own, move the debate forward.

“And politicians are between a rock and a hard place – the public don’t want change, despite knowing the system will cost significantly more in the future.

“People clearly want to see the status quo remain and the government pension provided universally without continued means testing in Australia.

“Meaningful and successful reform will need a range of supporting factors – an electoral mandate, leadership, cohesion and persistence.”

Key findings

  • Half of Australians are ‘thinking somewhat’ about retirement planning.
  • Awareness of the Age Pension is high at 92%.
  • Two-thirds of Australians know the Age Pension will cost more in the future.
  • 33% of younger Australians believe the Age Pension will exist in its current form, compared to 77% of Aussies over 65.
  • New Zealand residents are far more confident about policy stability compared with Australians, reflecting the frequency of changes.
  • Australians and New Zealanders were reluctant to contemplate major changes to the government retirement benefits and were divided about tax increases.
  • The survey found little evidence of a distinct generational divide in the views on the policy options for dealing with the increased costs of the Age Pension or New Zealand Super.
  • In Australia, 41% of couples and 35% of singles feel they could ‘get by’ on Age Pension income levels. Only 12% of couples and 12% of singles feel they could ‘live comfortably’ at that level.

Future[inc]

Population Ageing: Do we understand and accept the challenge?

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