Access to super age will probably rise, says Joe Hockey

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Treasurer Joe Hockey, who has plummeted in popularity polls since releasing his Federal Budget, has now foreshadowed a rise in the age that people will be able to access superannuation.

Speaking during an ABC question and answer session, Hockey said the government will have “more to say about retirement” within the current term in order to give people a “long lead time”.

 “I think it's something that we need to have a proper process to discuss, with all the affected stakeholders,” he said, before being pressed further by host Tony Jones and conceding that a rise could indeed become a reality in the near future.

“It is on my mind and it’s on Tony Abbott's mind. We’re thinking about how we’re going to make sure that the quality of life for Australians into the future is sustainable,” he said.

Last month the Australian Financial Review reported that the preservation age was to be considered in the Financial System Inquiry, headed by former CBA boss David Murray, and that any recommendations would be taken to the next election.

The Financial Services Council (FSC) yesterday released a statement saying that a raise to the preservation age is “essential” for adequate retirement savings.

CEO John Brogden said that at $75,457, the average superannuation fund balance at retirement isn’t nearly enough to sustain a comfortable standard of living.

 Australians need to aim significantly higher - towards the $424,000 mark - to guarantee a good retirement, he said. This would provide an annual income of $32,500 a year.

“Many Australians starting work today will live for more than one century,” Brogden said. “It is critical that the increased life expectancy of Australians is the driver for age pension and superannuation policy, so future generations of tax payers are not burdened with the cost of an ageing population.”

The FSC want to see the preservation age increased to at least 65 by 2035 – the same year people will have to be at least 70 to access the age pension.

Increasing the preservation age in this way will increase retirement savings by $1 trillion, Brogden said.

SEE MORE:

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  • david m on 22/05/2014 9:43:34 AM

    John Brodgen you are a disgrace! All you and your pals can see is the opportunity to stash another $1 trillion in your pocket for fees. If someone does the right thing and saves a little extra, works hard - pays their taxes and wants to retire at 60. That's not unreasonable. Meanwhile John, you and all your mates got the right to retire at 55. You and all your mates got the generous tax relief, now you want us future generations to work to the grave. Accessing one's own savings and accessing Age Pension ( which is a welfare payment) are different.

  • Coastie on 22/05/2014 10:16:41 AM

    I think maintaining the preservation age at 60 is important if we are moving the eligibility for the Age Pension to 70. Clients who are unable to work past age 60, for whatever reason, should be able to access their own money to spend on supporting themselves between 60 and 70. And then go onto some support benefit.

  • James on 22/05/2014 11:09:32 AM

    Yet again, the X & Y Generations are paying for the excesses of the generation before them. I've paid 25 years of taxes only to see my wealthy parents retired at age 65 with a pension - fat chance i'll get one. I bought an overpriced house off a boomer so I could put a roof over my families head and money in their pockets, I've had a portion of my wage compulsorily preserved (to age 55 when it first came in) to fund my future retirement needs - I thought was fair - I wrongly thought it was my money and gave me choices! and now, to rub further salt into my wounds as I approach my 50's I am being warned that my nest egg (Super) will be imprisoned until I am 65?. Get your hands off my money you grubby scoundrels - who would trust super now?

  • Melinda Houghton on 22/05/2014 12:38:20 PM

    I understand their thinking, however they are not really thinking!
    This will not add to the superannuation balances, it will stop people putting money into super and direct it elsewhere. Age 60 is sensible, but Age 65 is going too far for people to stomach. Super needs to stop being changed and messed with, or compulsory contributions will be the only thing going into super!

  • Innocent Observer on 22/05/2014 2:52:17 PM

    Well, the good news is we now know for sure whose interests they're putting first

  • Chris on 23/05/2014 10:22:22 AM

    having worked in the financial planning proffession for 28 years the biggest Issue is keeping pollys from continually shifting the goal posts on super people will simply stop putting personal funds to super .The Property sprookers would have been popping the corks after Mr Hokeys comments,just what we need another property boom .

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