Research released by Industry Super Australia has found that almost 40% of recent retirees struggle financially, which the group is using to support calls for a higher Super Guarantee rate.
38% of the survey respondents who had recently retired said they were either living on a very tight budget – with only enough for essentials – or weren’t making ends meet. This represents a “spike”, according to Industry Super Australia, with similar research from 2010 finding that 30% of recent retirees reported similar difficulties.
Over a quarter of those recently retired have had to go back to work, the survey found. But it also found that “retirement was thrust upon almost 45 per cent of workers, meaning the more they can put towards their savings during their working life the better prepared they’ll be when it ends”.
Industry Super Australia says the “only” way to deliver certainty for pre-retirees anxious about their savings was to increase the Super Guarantee rate to 12% by 2025 – which is the currently legislated timetable.
“With almost 40 per cent of retirees struggling to make ends meet Australian workers can not afford any delay to the promised increases in the super guarantee rate,” said Industry Super Australia Chief Executive Bernie Dean.
“Only by lifting the rate will workers be able to have the retirement of their choosing and the best chance to control when they end their working life.”
“With an ageing population and many retirees doing it tough, the only way for the government to defuse this ticking time bomb is to lift the super rate.”
There is a fierce debate ongoing about the appropriate rate of the Superannuation Guarantee, and when it should reach what rate. Some in the Coalition are campaigning for the rate to be paused or frozen – with support from bodies such as the Grattan Institute and ACOSS.
Labor has committed to the currently legislated timetable, which was passed under the Coalition.
The survey involved 734 industry super fund members, aged 47 or older, via an online survey or telephone interview.