The Household, Income and Labour Dynamics in Australia (HILDA) Survey is a household-based panel study that collects valuable information about economic and personal well-being, labour market dynamics and family life. It aims to tell the stories of the same group of Australians over the course of their lives.
The 14th annual statistical report of the HILDA Survey was released last month and includes some interesting results related to retirement income of Australians. As expected, the proportion of people aged 65 and over obtaining more than half of household income from welfare is over 50% across the entire 2001 to 2017 period.
The HILDA Survey shows a decline in welfare reliance among people aged65 and over since 2003 and suggests that superannuation is likely to be an important contributor to this decline. It does point out, however, that the most significant decline in welfare reliance occurred 2003 and 2009 with relatively little net change since 2009.
Another indication of the impact of superannuation is the decline in the proportion of new retirees receiving the Age Pension. The Table 1 shows the proportion of males and females receiving the Age Pension in the 2001 to 2003 period and in the 2016 to 2017 period.
That’s great for the new retirees but retirement is lasting longer as longevity continues to increase. As expected, reliance on welfare tends to increase with age (see Figure 1).
One way to reduce the reliance on the Age Pension in older age groups is for superannuation funds to be able help their members generate income for longer. The only way that superannuation funds can do this is by offering members retirement income solutions that provide longevity protection would help both the individual and the strain on the Age Pension.