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Future generations could be left reliant on the Age Pension

smashed money box

Hundreds of thousands of young Australians have wiped out their retirement balances under the government’s early release of super scheme, says new analysis from Industry Super Australia (ISA).

The analysis heightens fears the scheme could lead to a future generation left reliant on the Age Pension. 

ISA estimates around 395,000 people under-35 have raided their super savings, and about 480,000 Australians across all age groups could have wiped out their super, even before the second tranche opens.

ISA analysis based on ATO data on the proportions by age of those with accounts below $10,000, and Treasury statistics on the age distribution of early release shows that, on average, about 15 per cent of Australian workers have accessed their super early.

“Those early contributions are like yeast, without them you’re left with a much flatter nest egg,” said Industry Super Australia chief executive Bernie Dean.

“To have hundreds of thousands wiping their savings out mid way through their life is a tragedy waiting to happen and it will affect everyone. Every Australian deserves a good life in retirement, not just scraping by on the pension.”

While Industry Funds have supported this scheme’s intent to get cash to those in dire financial need, there have been troubling reports of super being used to gamble, buy alcohol or other types of discretionary spending.

ISA is again calling on members to only access their super as a last resort.

A 25-year-old taking out $10,000 now could have $49,000 less in retirement, a 35-year-old could lost up to $34,000 and a 45-year-old up to $23,000.  

The government estimated 1.65 million would take out $27 billion from super, but already 2.1 million have taken out at least $15 billion and it appears likely demand will far surpass forecasts.

“The Prime Minister and Treasurer must stick by their promise to increase the super rate because its critical to helping these people rebuild savings they’ve wiped out, and avoid tax hikes on working people to prop up more people drawing a full pension,” said Mr Dean.

9 comments

I also saw on the news some people being interviewed and they were already many thousands in debt on their MANY credit cards --so paying a heap in interest  and looked like they had spent a good deal on botox etc. and had drawn out 20 thousand 'from their super -- people like this will never learn

It is high time that Universal Pension was re introduced.

A Universal wage for all. Jobs will keep getting replaced by technology, robotics, machinery, and computers. https://www.thevenusproject.com/resource-based-economy/

The increase in the super rate is not a "promise", it is legislated which means that unless the legislation is repealed that it will automatically proceed. As an increase in super is a further cost on a business maybe now is not the time to enforce the legislation as it may be preferable to have a job in lieu of an increase in super in the short term.

I just love all these super scenarios for younger persons.... Oh hey Super Funds how much money do you rake in on fees for that same amount that has been withdrawn...I wonder.... Missing from the calculations I see.....

I had to cash in my super - which was not huge - when I was in my late fifties to pay for an acrimonious divorce settlement after I got made redundant.  I had always been very careful with money but I just could not manage on the pittance I got from Centrelink.  It took several years of wrangling in the Family Court to get a final settlement.  I did not have a huge amount in super anyway, and because I was no longer working and contributing it was being eaten away by fees.  If I hadn't done what I did I would probably have lost the lot anyway.  I have survived reasonably well on the Age Pension for over 10 years, but do wonder what will happen to me as I age.  Hopefully I will stay healthy for some time to come.  And it's time that a Universal Basic income was made available in this country.

For vast numbers of people, less in super means more in pension. Many of today's retirees would have far higher incomes and less stress if they had less in super and/or savings. Unless the stupid pension system is changed, the incentive to withdraw from super will remain strong.

I’m sure that in amongst the statistics are many genuine people who withdrew Super to help pay their bills amd take care of their families. When times are good in the future they can make personal contributions back to Super. some Decisions have to be made now without worrying about 30 plus years in the future

The big bankers have turned debt into a big industry. First, they get countries into debt and then they get their people into debt. That's who controls the world.

 

In 1700 there was only 1 billion  on the planet ,now there are 8 official and 2 unofficial ,I kid you not all over Asia ,Central America and the US gringos run for the hillswhen the census girls are on their way..a  lady I knew had 15youngsters livingwith her yet at the Philippine census told them she was a widow and lived on

her own

 

we are living on 3.5planets,what happenswhen 5 billion get flush toilets and a car ?

 

Mao was right,we need sterilisation in a big way and a lower standard of living

9 comments