Super news for July 2021

Pandemic has long-lasting impact on older Australians

The COVID-19 pandemic has hit older Australians hard, according to the latest Council of The Ageing’s State of the (Older) Nation 2021 report, with the percentage of those surveyed who ranked their physical health highly (7 or more out of 10) dropping from 67% in 2018 to 57% in 2021.

Quality of life ratings dropped from 78% to 73%, mental health fell from 80% to 72%, and the quality of social relationships was down from 72% to 66%.

The report surveyed over 2800 Australians aged 50 and over, with quotas set for state and territories, metropolitan and regional areas, gender and age.

When it comes to retirement and financial security, Australians are working longer hours and feeling less secure about their financial future, with those ranking their financial situation highly, falling from 63% to 58%.

Over half (55%) felt secure about their finances being able to meet their needs for the rest of their lives but that left 45% who didn’t feel secure about their financial future into retirement.

And when it comes to working in 2021, less than half of those aged 65 had retired (at 49%) compared to 60% in 2018.

Intergenerational report forecasts doubling in older Australians

The government’s latest Intergenerational Report (IGR) has forecast the proportion of the population aged 65 and over will increase from 16% in 2019–20, to 23% by 2060–61.

Effectively, this will translate to a doubling in the number of Australians aged 65 and over by 2060–61.

The Association of Superannuation Funds of Australia (ASFA) says that with the report also projecting government expenditure on health and aged care to increase from a combined 5.3% of GDP in 2019–20 to 8.3% in 2060–61, older Australians will need to rely on their superannuation more than ever.

Treasury projections in the report also suggest that the median superannuation balance will grow substantially over the next 40 years, increasing from around $125,000 in 2020–21 to around $460,000 in 2060–61, as measured in 2020–21 dollars.

They attribute this growth to a maturing superannuation system. The superannuation guarantee will also have been at 12% for 35 years by 2060–61.

“This report highlights the importance of superannuation for Australian retirees who face higher medical and aged care costs in the coming decades,” ASFA chief executive officer Dr Martin Fahy said.

The report predicts the ratio of working-age people to those over 65 to fall from 4.0 to 2.7 over the next 40 years, as the baby boomer generation reach retirement.

Hostplus to grow through more mergers

Hostplus and Intrust Super announced they well progressed in merger talks and have signed a Successor Fund Transfer Deed with a target data of 26 November 2021.

The merger will add approximately $3 billion to Hostplus’ current $66 billion in funds under management and an additional 90,000 members to Hostplus’ 1.25 million.