AUSTRALIA - Increasing the superannuation guarantee (SG) from the mandatory 9% to 12% will reduce the payments under the age pension, a government pension payment, by 2.3%, a report by AMP and NATSEM has claimed.
AMP Financial Services managing director Craig Meller said: "Australia is a wealthy nation yet our personal savings, including superannuation, are still reasonably low. By increasing the SG to 12% the average superannuation balance could increase by one-quarter."
Findings showed in 1909 only 23,000 people received the age pension. Today 2.3 million are on the age pension or 77% of people aged over 65.
In addition, the research show Australians are not saving enough to afford a comfortable retirement, but they are working less and spending more years in retirement than ever before.
"Australians have very high retirement expectations but we are not saving enough to even afford a comfortable retirement let alone one that meets our expectations," he added.
NATSEM author and University of Canberra Associate Professor Dr Simon Kelly added there was a significant gender gap in personal savings and superannuation for women.
He said: "Women have sixth-tenths the personal savings of men and only have half the super of their male counterparts."
The report comes after last week AMP announced it would increase the pension contributions it pays for its employees to 12% by 2014 (Global Pensions, November 18, 2009).
The British Medical Association (BMA) has warned chancellor Philip Hammond to reform the NHS pension scheme rules or doctors will reduce their working hours.
The lifetime allowance should be scrapped and replaced with a lower annual allowance, last week's Pensions Buzz respondents said.
Action for Children Pension Fund has outsourced its pensions administration to Trafalgar House.