Australians unprepared for life on age pension

Most Australians are confused about the age pension even though many of them will be completely reliant on it in retirement, a survey has found.

Thirty-four per cent will need the full age pension post-retirement, but Sunsuper's survey of more than 1500 Australians found that 88 per cent of those surveyed do not know how much the age pension will provide.

Although over a quarter (28 per cent) thought they knew, less than half of these (43 per cent) answered correctly when asked. Most over-estimated its value and 18 per cent thought the age pension was double its real value.

Sunsuper customer service general manager Steven Travis said the results were shocking: 70 per cent of retirees will receive at least a partial pension but do not realise the kind of lifestyle it will provide for.

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"Most Australians dream of travelling around Australia or overseas and pursuing new hobbies in retirement. However, most people don't realise that the current maximum age pension is $733 for singles and $1,106 for couples per fortnight," he said.

"Based on Sunsuper's lifestyle modelling, if you were completely reliant on the age pension in retirement it would mean only eating out occasionally at budget food outlets, saving hard for one or two short breaks near home each year, relying on the public health care system and free benefits to cover medical costs and only participating in free or minimal-cost leisure activities."

Although 40 per cent know the pension is based on an income and assets test, only 23 per cent of those are baby boomers, according to the survey.