Australian households’ saving records are among the worst in the developed world, according to a report for The Investment and Financial Services Association.
Between 1989 and 2006, the average household saving rate in Australia was less than 3% of disposable household income, well behind the 16% rate achieved in Italy, 13.8% in Korea and 12% in France. Even Americans save 3% on average of their annual household income.
The figures support the widespread fear that most Australians won’t have the savings they need to fund their retirement.
Two million retired Australians are dependent on a government pension as their primary source of income, and Australian Bureau of Statistics figures show that 684,500 Australians aged over 45 still in the workforce expect to rely on a pension as their main source of income in retirement.
The need for a greater income is likely to be contributing to the changing retirement intentions of Australian men and women.
Early retirement is becoming a thing of the past. New figures from the ABS show that while retired Australians on average had quit work at age 52, those who retired in the past five years on average quit at 60, and those looking ahead to retirement on average plan to retire at 63.
Good economic times are encouraging women in particular to work longer. On average those already retired did so at 48, but those who retired in the past five years did so at 59, and those contemplating retirement on average plan to do so at 62.