Fewer Australians are relying on the age pension than 20 years ago, an indication that the national retirement scheme is successful, the peak superannuation body says.
Association of Superannuation Funds of Australia chief executive Martin Fahy said there are six common myths associated with superannuation that have been eroding public confidence in the $2.5 trillion sector.
ASFA has published a ‘mythbusting paper’ to debunk these popular misgivings, which says superannuation is getting more people off the age pension, is improving retirement outcomes and helping to lower age pension expenditure.
ASFA said the proportion of Australians retiring on an aged pension has decreased as superannuation has accrued, falling from 79 per cent in 1997 to 70 per cent in 2017.
‘By 2050 we will have reduced the reliance on the full or part age pension to less than 50 per cent,’ Dr Fahy said.
Thanks to super, expenditure on the age pension is set to remain contained at around 2.6 per cent of gross domestic product, despite an ageing population, ASFA said.
The paper also says superannuation and owner occupied housing are the dominant forms of saving for nine out of ten households, and returns on super tend to be higher than investments outside of super, over a 10 year period.