Australia: Super on their minds

A recent global survey on "Consumer Attitudes to Savings" conducted by Aviva plc, found 57% of Australians worry they are not saving enough for retirement.[1]

Australia is rated along with 12 other countries, including the United Kingdom, United States, Turkey, Italy, Spain, Netherlands and Germany.

A culture of "spending" may be partially to blame for lack of retirement savings in Australia, with 33% of respondents saying they prefer to spend rather than save their money.[2]

This is compared to only 11% of our British counterparts who are looking to spend, rather than save. The Brits are also marginally more comfortable with their retirement plans, with 42% saying they worried about their retirement savings.[3]

In Australia, the average superannuation balance for men is A$78,700 and women A$43,300. These amounts do rise significantly for people aged between 55 and 64 years, with men averaging A$183,600 and women A$94,700.[4]

Still, this isn’t enough, with local professionals agreeing you need A$520,000[5] to generate an annual income between 60 to 70% of your pre-retirement pay which will allow you to live comfortably in retirement[6].

The first step to getting retirement savings on track is contacting a financial adviser, yet many of the survey respondents, who have recognised their lack of superannuation savings, still haven’t sought advice about their finances.

In Australia, only 17% of those surveyed said they have received independent financial advice. In the UK, ranked first in this category, this was only slightly higher at 20%.[7]

Allan Griffiths, chief executive officer of Aviva in Australia said it’s surprising more people aren’t heeding the message to get their finances into shape – because this is what will determine what sort of retirement lifestyle they have.

“The beauty of retirement savings is that people ‘can have their cake and eat it too’, by starting to save a little towards superannuation early in their working life they can still continue to spend as they see fit,” said Allan.

“The key to a robust retirement savings plan is starting early so you don’t have to contribute great chunks of funds into your superannuation during the later part of your working life,” he said.

“For example, when you’re in your twenties you might have high disposable income and low financial commitments so this is a good time to contribute some of extra funds to superannuation.

"And then in your thirties, with the commitments of mortgages and school fees, you can put in a little less to your super and still know that your retirement fund is being looked after.

Once you are in your forties and fifties with less commitments you can look at concentrating on your superannuation again,” said Allan.

“I encourage everyone to go and see a financial adviser early in their working life to assess their financial goals and needs for now and the future. An adviser will take into account their client’s current situation plus have extensive knowledge on optimum retirement strategies,” said Allan.

-ends-

For further information please contact:
Bernadette Collins
Public Affairs Manager
Phone: (03) 9829 8818

Notes to editors:

• Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners is the Australian funds management arm of Aviva plc. Through these companies we provide products and services in the areas of wealth creation and wealth protection for more than 300,000 customers throughout Australia.
• Globally, Aviva Australia is part of Aviva plc, the world’s sixth 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$78.6 billion, and more than A$645 billion of assets under management (as at 7July 2005). The group has more than 60,000 employees and 30 million customers worldwide.
• The information in this document reflects Aviva Australia Holdings Limited (ABN 38 095 045 784) 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 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 and it is not a substitute for professional advice. Applications to invest in a financial product issued by Aviva, or any of its related entities, must be made by completing the application form attached to the applicable Product Disclosure Statement ("PDS"). A PDS is available from Aviva or your financial adviser. Before making an investment decision on the basis of the information above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the information is appropriate in the light of their particular investment needs, objectives and financial circumstances. Aviva does not receive any remuneration in relation to the provision of information available from this press release which is of a general nature only.