AUSTRALIA - Education should be a key concern to those implementing the UK's National Pension Savings Scheme, judging by the Australian experience of compulsion.
According to a Mercer study, many Australians could become reliant on the government in their retirement because they have a poor understanding of superannuation and financial issues.
It said three in five were unsure of the style of fund they had, and a further two unsure of their current investment strategy.
Peter Promnitz, chief executive of Mercer said the low levels of financial literacy could hurt Australia’s ability to support an ageing population.
“It may also limit the quality of a person’s lifestyle in retirement, their overall financial well-being and confidence at work,” he added.
The findings said those who expect to be less comfortable in retirement than now anticipate they will rely more heavily on the government.
This group expects government assistance to account for 27% of their total retirement funding, compared to 13% for the study overall.
The Mercer financial literacy and retirement readiness study was conducted in April this year and surveyed a random sample of 802 working Australians.
By Lisa Haines
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