Think tank calls for pension and superannuation overhaul

In a new report a think tank has criticised the Australian pension system where taxpayers pay a significant portion of their income to support pensioners whilst still paying their own superannuation.

Average workers are expected to contribute $3,500 a year for “someone else’s retirement” compared to $6,270 for their own in superannuation, said The Centre for Independent Studies.

Titled “The myths of the generation bargain”, the CIS paper examined generational changes to the pension and how it compares to current standards of living and wages.

RELATED: Study finds retirees spend less on themselves and die rich

Researcher Simon Cowan said that the metrics in the release showed today’s pensioners have a better bargain than previous generations.

“Today’s retirees, who in their past working life paid a smaller proportion of their salaries to support the retirees of that time, now demand a greater proportion of the salaries of those working today,” Cowan said.

CIS revealed that if policies remain the same, by 2054 the average worker will contribute $9,424 to pensioners and only $11,895 to their own in superannuation.

The paper also noted that to accumulate half a million dollars in superannuation today, Australians would have to be earning much more in income than average to do it. This doesn’t help considering Australians are living longer and healthier lives now more than ever and thus require a robust nest egg.

As a result, CIS is calling on the government to make five policy changes which include increasing the retirement age and including the family home in means testing for pension eligibility. Other suggested changes to superannuation include restricting withdrawals from retirement funds early.

Things you could do now to plump up your nest egg if you’re near the retirement age:

Nest egg tips for workers with more time between now and retiring:

  • Research and choose your superannuation fund wisely. You might find switching funds will be beneficial for your situation

  • Don’t withdraw money from your super and find other ways to retrieve funds such as taking out a low cost personal loan instead

  • Diversify your investments for long haul success

  • Top up your super if and when you can afford to

Want to see what the best rates in the banking market are? The Mozo Rate Chasers Roundup hit our blog this week so be sure to check it out!

Term deposit comparisons on Mozo - last updated 13 August 2022

Search promoted term deposits below or do a full Mozo database search . Advertiser disclosure
  • Mozo Expert Choice Badge
    Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    3.85% p.a.
    2 years
    $1,000
    Yes up to $250,000

    Great rates and incentives incl. 0.10% added loyalty bonus at renewal. Option to have interest paid to another bank. Winner of the Mozo Experts Choice Awards 2021^ for Term Deposits.

    Details
  • Mozo Expert Choice Badge
    Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    3.25% p.a.
    1 year
    $5,000
    Yes up to $250,000

    Competitive rates for one year term deposits. Start investing with as little as $5,000 to $1,000,000. For personal customers who want to invest above $500,000, or for non-personal customers, contact Challenger’s call centre to discuss account application options.

    Details
  • Hot Deal Earn a competitive rate of 3.24% half yearly or 3.25% annually on an 18 month term
    Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    3.10% p.a.
    1 year
    $5,000
    Yes up to $250,000

    Deposit of $5,000 up to $5 million. Choose a term from 1 month to 5 years. Select a range of convenient interest payment options. $0 establishment or ongoing fees. Easy tracking using the mobile banking app.

    Details
  • Mozo Expert Choice Badge
    Online Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    3.35% p.a.
    2 years
    $5,000
    Yes up to $250,000

    No set-up or account keeping fees. Deposits up to $250,000 per customer are guaranteed by the Australian Government. Mozo Experts Choice winner for Term Deposit 2022.

    Details
  • Mozo Expert Choice Badge
    Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    3.55% p.a.
    1 year
    $1,000
    Yes up to $250,000

    Great rates and incentives incl. 0.10% added loyalty bonus at renewal. Option to have interest paid to another bank. Winner of the Mozo Experts Choice Awards 2021^ for Term Deposits.

    Details

* Different interest rates apply to different amounts or different interest payment frequencies.

^See information about the Mozo Experts Choice Term Deposit Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.