AMP research confirms slump in retirement confidence

Australians are severely lacking in confidence when it comes to their retirement according to new research commissioned by AMP, with the surging amount of funds required to retire comfortably flagged as a major concern by respondents.

The inaugural Retirement Confidence Pulse, informed by a survey of 2,000 people, found only 50 per cent felt financially secure about their retirement. More than one-third of respondents over the age of 65 did not feel confident about their retirement and were mainly concerned that their savings would not last, while only 40 per cent of women felt confident compared to 60 per cent of men.

The research also revealed 60 per cent of partnered Australians were more confident compared to only 40 per cent of single respondents, at the same time as only one-third of separated or divorced women felt financially secure compared to more than half of separated or divorced men.

This comes as the latest data from the Association of Superannuation Funds of Australia’s (ASFA’s) Retirement Standard indicated couples over the age of 65 need $75,319 a year to maintain a comfortable lifestyle during retirement, which has increased by more than $13,000 in the last five years.

“Australians over the age of 65 will make up nearly a quarter of our population within four decades – a demographic shift set to reshape the nation’s economic and social landscape,” Alexis George, AMP chief executive, said.

“Yet, as this Pulse shows, despite growing super balances and national wealth, too many feel financially insecure about life after work – an issue that needs to be front and centre for policymakers and the superannuation industry.”

The research also found that Australians on higher incomes were more confident in their retirement plans, with 75 per cent of those with $190,000 to $250,000 in annual earnings secure compared to 40 per cent of those earning under $45,000 a year and 50 per cent of those earning between $45,000 and $135,000.

Off the back of the results from the first ‘pulse’, AMP also announced the launch of its ‘Retirement Confidence Hub’ with the goal of “bridging insight with practical industry applications, raising awareness of key social issues and opportunities and informing policy reform” to help Australians feel more financially secure ahead of retirement.

The hub’s Advisory Committee features AMP’s Chief Economist Dr Shane Oliver, AMP’s Director of Retirement Ben Hillier and AMP Foundation chief executive Nicola Stokes.

“The Pulse is our scoreboard; the Retirement Confidence Hub is our game plan – a standing effort to turn evidence into action so more Australians can feel confident about their retirement, and unlock a better quality of life,” Chair of The Retirement Confidence Hub, Ben Hillier, said.

“This requires a system that is easier to understand, improved financial literacy, easier access to guidance and advice at critical life moments, and more solutions that provide lifetime income and which unlock the considerable wealth tied up in property.”