State Street Global Advisors have found that 40% of Australians have minimal confidence in their preparedness for retirement, despite recent reforms.
State Street Global Advisors (SSGA) released its 2022 Global Retirement Reality Report, which surveyed over 3,500 workers across Australia, US, the UK and Ireland, including around 600 in Australia.
The survey aimed to measure the perceptions surrounding future retirement, specific barriers and the behaviour of those leaving the workforce.
Although the Australian retirement system experienced recent changes including Your Future Your Super (YFYS) reforms and the Retirement Income Covenant, 40% of Australian respondents expressed little confidence regarding their readiness to retire.
This percentage had marginally changed over the last four years, despite system changes.
The report identified that the confidence deficit was the most prevalent amongst those on lower incomes as well as those closest to retirement.
Jonathan Shead, head of investments at State Street Australia, commented: “There is clearly still much work to be done, by both industry and government, in simplifying, explaining and confidence building for our national retirement system”.
Additionally, 34% of Australians surveyed indicated a changed outlook on retirement due to pandemic-inspired job mobility. This statistic was higher in comparison to the UK, Ireland and US, which sat at 25%.
Amongst the factors most negatively impacting confidence surrounding retirement, inflation was the largest dampener. This was present for both Australia, with 65% including inflation in their top three factors, and the rest of the world, where 70% selected this issue.
Mortgage or rental costs were other major concerns troubling 35% of Australians, amidst rising interest rates and economic slowdown globally.
Additional findings indicated that women demonstrated far less optimism towards their financial readiness for retirement, with only 18% of women feeling prepared compared to 38% of men. Only 17% of women were confident they will be able to retire when they want to, contrasting 38% for men.
