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.

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