Australia: Singles pay more

Retirement will cost single Australians’ $10,000 per annum more than for each member of a couple, according to Shaun Williams, Aviva’s General Manager, Group Business Development.

Research has shown couples enjoying a comfortable retirement will spend approximately $43,000, or $21,500 each a year, while single people are looking at $32,000.¹

Shaun warns single people to make a concerted effort to increase their retirement savings as a comfortable retirement is almost one third more expensive for them than for members of a couple.

"As you can see it is not a case of costs being halved just because there is only one person involved. And when you think about it, this make sense with single people and couples having similar housing, utilities and services costs," said Shaun.

"However, couples have the benefit of saving for retirement during their working lives with potentially two incomes for the majority of the time, rather than one solitary wage."

In Australia, 28 per cent of people aged over 65 live alone, while 63 per cent live with at least one other person (usually part of a couple).²

"Single people need to seriously consider their retirement needs because they alone are looking out for their financial future," comments Shaun. "However members of couples shouldn’t think they can take it easy because in the future they too could find themselves single – be this through premature death of a partner, incapacitation of their spouse requiring care or divorce."

In 2003, 79 per cent of single older people received government pensions and benefits as their principal source of income. Couples weren’t far behind with 72 per cent receiving the pension as the main income source.³

"In the future these figures will begin to change dramatically. We will be expected to fund our own retirement so everyone needs to take control of their own retirement lifestyle by making some simple provisions now," said Shaun.

Unfortunately women’s retirement funds tend to be particularly vulnerable – and those women who move from couple status to single may find their superannuation has been short-changed over the years.

Right now, two worrying statistics for women are 40 per cent of women are working part time⁴ and one in three marriages end in divorce.⁵

This means some women will find they have sacrificed superannuation payments when working part-time, often due to child rearing, and then become single and need to fund higher retirement costs than they expected.

"What this means in the long term is everyone needs to consider alternative scenarios when planning for their financial future. And, it needs to be done at an individual level. Don’t let a change in circumstances cost you your retirement lifestyle," said Shaun.

A qualified Financial Adviser can structure an investment plan taking all scenarios into account. It ‘s important to begin this process as early in your working life as possible.

¹The Association of Superannuation Funds of Australia Limited, Retirement Living Standard detailed budget breakdowns, Comfortable lifestyle and modest lifestyle, February 2004, Sydney.

²Australian Bureau of Statistics, Income and Welfare, There’s no place like home, 2002, Canberra.

³Australian Bureau of Statistics, Household Income and Income Distribution, Australia, July 2003, Canberra.

^{4Australian Bureau of Statistics, Age Matters, February 2004, Canberra.}

⁵Australian Bureau of Statics, Demography News, January 2004, Canberra.

For further information please contact:
Simon Morgan
(03) 9829 8892
0407 966 632

Notes to editors:

• Aviva Australia is a group of two specialist financial services companies: Navigator Australia Limited and Norwich Union Life Australia Ltd. Portfolio Partners, the Australian funds management arm of Aviva plc, is a sister company. Through these companies we provide products and services in the areas of wealth creation, wealth management and wealth protection for more than 300,000 customers throughout Australia.
• Globally, Aviva Australia is part of Aviva plc, the world’s seventh largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
• Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$66.08 billion, and more than A$472 billion of assets under management (as at 1 January 2004). The group has more than 59,000 employees and 25 million customers worldwide.
• The information in this document reflects Norwich Union Life Australia Limited's (NULAL) and NULIS Nominees (Australia) Limited's ('NULIS') understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information is not, nor is it intended to be, comprehensive or a substitute for professional advice on specific circumstances. The securities advice or information given in this document is of a general nature and has not taken into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision on the basis of the advice above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the advice is appropriate in the light of their particular investment needs, objectives and financial circumstances.
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