What must change in retirement

Australia has a problem. That’s what you told us in the Retirement Income Review Survey 2019.

YourLifeChoices polled its 230,000 members in a wide-ranging survey about retirement income to inform its submission to the government review announced by Treasurer Josh Frydenberg in September. The retirement income review is the first in 30 years and was to focus on “putting more money into the pockets of retired Australians”, the Treasurer announced.

YourLifeChoices was quick to commit to a submission for many reasons, but particularly because we are the voice of retirement in Australia – informed by the people who know about life leading up to and in retirement. Your insights had to be delivered.

And you could not have been clearer in your views.

The Retirement Income Review Survey 2019 was conducted over five weeks late in 2019. It drew 4941 responses – 92 per cent from respondents aged 50–79 – to 51 questions.

They belonged to the following retirement tribes:

  • Affluent (self-funded homeowners) couples 29.3 per cent and singles 9.3 per cent
  • Constrained (homeowners on a full or part Age Pension) couples 33.6 per cent and singles 16.2 per cent
  • Cash-Strapped (renters on a full Age Pension) couples 3.8 per cent and singles 7.8 per cent.


We asked what doesn’t work and the following responses were typical and oft repeated.

“Contact with Centrelink.”

“Age Pension levels too low.”


“Pension confusion, should be simple without asset tests.”

“It’s very unequal. Women have not been able to save … to help their retirement, e.g. super, as we are not employed full time.”

“Governments live on cloud nine. They have no idea of the lives of pensioners.”

“Prices are rising all around us and there is no relief. As retirees on fixed income, it is unquestionably getting harder … The parcel of goods the government uses for rate of inflation appears to be incongruous with the rate that prices are rising for living expenses.”

“Tax for working pensioners should be lower.”

“Too few concessions for pensioners.”

“We need a non-means tested Age Pension, as in the UK. That would get the massive Centrelink bureaucracy out of our lives.”

“The asset test and taper rate has been doubled since 2017. The taper rate should be reversed.”

“Too little money; too many hurdles to get support.”

“People renting in the private sector need a higher pension or higher rental allowance.”

 What you told us and we told the government

Asked Do you feel fully supported by the Australian retirement system?Almost 70 per cent (68.9 per cent) of respondents said no.

Asked to rank the importance of the retirement pillars – Age Pension, compulsory superannuation, voluntary savings and family home –you replied the family home (72.26 per cent), the Age Pension (58.38 per cent), superannuation (57.04 per cent) and voluntary savings (41.4 per cent). Yet … the family home is not even being considered by the government as a separate pillar, but has been lumped in with voluntary savings.

YourLifeChoices publisher Kaye Fallick says: “This reveals a fundamental misunderstanding of the most important source of wealth, security and wellbeing in our later years.”

Asked if the current Age Pension base rate is sufficient, a resounding 80.66 per cent said no. When segmented by tribe, 74.06 per cent of Affluents said no, along with 83.11 per cent of Constrained retirees and 91.67 per cent of the Cash-Strapped tribes.

The sentiment is supported by organisations such as the Australian Council of Social Services (ACOSS), which has determined that 12 per cent of Australian pensioners are living in poverty. The OECD, which uses a different method, found that 22 per cent of Australians aged 66 and over suffered from income poverty.

Asked if the Age Pension base rate should be increased, 46.6 per cent said yes by at least 30–40 per cent; 20.24 per cent said yes by 50–60 per cent and 25.45 per cent said yes by10–20 per cent.

Asked about the current income disqualifying thresholds, an overwhelming 83.71 per cent said they were unrealistic.

“At the core of this issue is the need for more flexibility to earn an income while receiving an Age Pension,” says Kaye. “It is fair to say that New Zealand pension rules are far more flexible in this respect – and that New Zealand enjoys the greater productivity gains that flow from allowing older citizens to work for longer.

“It is apparent that older Australians simply should not be forced to exist in poverty simply because their main source of income, the Age Pension, will be reduced or removed, if they work longer hours each week.”

Asked about the suitability of asset thresholds, 57.91 per cent said they were too high.

Asked whether the rental supplement was sufficient, 81.1 per cent said no and 37.5 per cent of those respondents said it should be increased by 30–40 per cent.

Asked if their main income source would provide a dignified retirementa question that should sit at the heart of the retirement income review – the division between the tribes was loud and clear and showed exactly where the system should be altered.

Affluent couples answered: yes (56.7 per cent), unsure (29.20 per cent), no (14.1 per cent).

Constrained couples were far less comfortable: yes (23.71 per cent), unsure (29.11 per cent), no (47.18 per cent).

The Cash-Strapped were unequivocal: yes (10.93 per cent), unsure (19.54 per cent), no (69.54 per cent).

“This question sits at the heart of the retirement income policy debate,” says Kaye. “There is no one typical retiree – there are three broad groups – and home ownership underpins the confidence and security of two of those groups. Renting in retirement almost certainly spells a later life of poverty, hardship and insecurity.

“Unless these cohorts are considered in relation to the benefits they receive and the taxes they pay, there will never be equity for all.”

Asked whether Australians should receive a Universal Age Pension, regardless of income and assets, the overall response was yes (53.52 per cent). Sorted by tribe, the responses were: Affluent (65.49 per cent), Constrained (47.05 per cent) and Cash-Strapped (42.47 per cent).

Asked if there should be special provision for women whose balances are typically below the average, 81.64 per cent of respondents said yes.

Asked if there should be more incentives for people to work for longer, 65.11 per cent of respondents said yes.

Asked whether deeming ratesshould be changed automatically in line with an indicator such as the Reserve Bank cash rate, rather than being the responsibility of the relevant minister, a resounding 89.46 per cent said yes.

Asked if the taper rate (part of the Age Pension assets test, which doubled in 2017 to reduce a retiree’s annual pension by $78 for each $1000 of assets above the relevant threshold) should be reassessed,the yes results, by tribe, were: Affluents (83.97 per cent), Constrained 81.22 per cent) and Cash-Strapped (79.86 per cent).

Asked if superannuation fees are sufficiently transparent, 74.49 per cent of respondents said no.

The core response as to whether Australians are supported by our retirement income system is no.

If we look at sustainability as government ‘affordability’, then it is clear that the amount spent on the Age Pension as a percentage of the GDP is very low – in fact the fourth least among OECD nations. “So, while there are many political statements that the Age Pension is unsustainable and a burden on future generations, the maths suggest otherwise,” says Kaye.

“We certainly don’t spend much on it, relative to most other developed economies, and the numbers of citizens receiving the Age Pension has also reduced, as stated in the consultancy paper for this review.

“Could this money be better spent or better targeted?

“No doubt.”

YourLifeChoices says the government must:

  • Increase the base rate of the full Age Pension to an amount that better aligns with the cost of retirement.
  • Increase the rental supplement to a more realistic amount to limit housing stress.
  • Reduce the penalty for earning income, e.g. remove the income test attached to the Age Pension.
  • Encourage a higher mature adult workplace participation.
  • Consider capping the number of legislative changes to retirement income or to grandfather all legislative changes to support longer-term planning
  • Review the 2017 changes to the taper rate to encourage people to save and self-fund.
  • Review the role and efficacy of Centrelink as the delivery agency for the Age Pension.


YourLifeChoices believes that in the wake of the failure of the financial services sector to deliver reliable advice, the government must step up and provide more independent, adequate and affordable support for the millions of Australians entering retirement in the next decade.

Finally, we wish to honour the sentiments of the legislators who introduced the Age Pension in Parliament in 1908. When it became law, it was commended with the following words: “… it removes the idea of old-age pensions from any suggestion of a charitable allowance. An old man, who has done his duty as a citizen for 25 years (is) as much entitled to a pension as a commander-in-chief or a chief justice.”

The pension was a reward for service. It should still be considered in this light. It is not a handout.

Do you believe the government review will have a positive impact on your retirement?

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Written by Janelle Ward

Energetic and skilled editor and writer with expert knowledge of retirement, retirement income, superannuation and retirement planning.

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