Plans to increase the pension age to 70 mean regulations surrounding access to superannuation must also change, according to the Financial Service Council.
With Australians living longer, and the Federal Government’s move to increase the pension age, FSC chief executive, John Brogden, has backed recommendations to the Murray Review to put the preservation age up to 65.
“Many Australians starting work today will live for more than one century,” he said.
“Pension, super and employment settings must ensure people have enough to live on when they retire and maintain budget sustainability.
“Our submissions to the Murray Review, recommends an increase in the preservation age to at least age 65 and that it should be linked to life expectancy.
“However, this should be flexible for those who can’t continue working due to ill health or who are in physically demanding jobs.
“This will increase private savings, improve living standards in retirement, boost Government tax receipts and reduce age pension payments.
“While the increase in the age pension access to 70 is an important and necessary step, Australia cannot sustain a ten year gap between when superannuation and the age pension can be accessed.
“There is no point in increasing the age pension age if people will simply exhaust their superannuation savings before qualifying for the age pension.”
Makes sense. Even today, many people are working to at least 70.