New research from Challenger has confirmed that superannuation is helping drive down reliance on the Age Pension.
A position paper published by Challenger this month has pointed to the fact that superannuation has moved from merely supplementing the Age Pension to substituting it for an increasing number of retirees.
It claimed the evidence for this was already in, because at June 30, last year, only 42 per cent of over-65 cohort were getting the full Age Pension, with a further 28 per cent on a part pension.
“Put another way, more than half of today’s retirees (58 per cent) have sufficient means to reduce, or eliminate, their entitlement to government income support and growing super balances will be playing a material part in this story,” the Challenger position paper said.
It said the trend towards the need for stable retirement income was clear and went on to suggest that the current discussions around Comprehensive Income Products in Retirement (CIPRs) represented an appropriate forum to advance the debate.
“The risk of running out of money in retirement cannot be managed by most retirees on their own,” the position paper said. “This risk needs to be pooled or outsourced to a stronger balance sheet.”