Are Aussie retirement savings at their lowest ebb?
Retirement savings accounts are at their lowest ebb since the global financial crisis hit in 2008, according to new figures.
Aussie "retirement adequacy" is at its lowest level since the crisis, falling two percentage points on the latest AMP Retirement Adequacy Index.
Market volatility and subdued investor sentiment are behind this downturn, according to the wealth management company, whose report noted that contributions to superannuation have fallen.
Aussie contributions to super top-ups fell to 12.3 per cent of salary, which is the lowest since index records began in 2006.
AMP financial services managing director Craig Meller said savings contributions have fallen markedly among older Australians, who traditionally put more into their schemes as they approach retirement.
He said: "It's important our industry continues to focus on educating customers about the benefits of super as a long-term savings strategy – offering individuals a wide range of investment opportunities."
Households have been far more cautious about their spending over the last few years, particularly in light of the 2008 crisis.
This was reflected in the latest Commonwealth Bank of Australia figures, which showed continued declines in spending compared to last June. However, there has been a much greater emphasis on savings accounts too.
Banks have been encouraging savers to put their money into term deposits rather than traditional savings vehicles, emphasising the improved interest rates in the current market.
This will help Australians to maximise the potential of their investment returns – concerns over which underlie the resignation towards superannuation, where voluntary contributions have dropped off.
Worryingly though, a drop off in super top-ups will leave a greater proportion of Aussies relying on state provision during their retirement.
Deloitte Access Economics partner Chris Richardson notes that this has wider economic implications and "could put considerable strain on future governments and taxpayers".
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