Nearly half of Australians are ‘scared’ or do not feel financially confident about retiring as a result of the COVID-19 pandemic, according to Colonial First State (CFS).
Research by CFS found that 23% of those surveyed aged between 30 and 65 said they would be forced to delay retirement due to the virus’ impact. Those over 55 were more confident they could still retire as planned, whereas Australians aged between 35 and 49 were the most sceptical and financially underprepared.
CFS general manager for product, Kelly Power, said: “It has been a big wake up call for those Australians in their prime working age regarding their employment, savings, expenses, investments and super, and many have been forced to get a better grasp of their finances.
“Younger Australians who still have time before retirement are feeling more anxious about retiring than their older counterparts because they’re still building up their savings pool while the reality of retirement costs start sinking in.”
Since the start of the pandemic, 34% said they had saved less than usual due to loss of income, or an increase in bills. While half said they were planning to change their lifestyle financially after the pandemic, more women were willing to reduce spending compared to men (53% versus 46%) once the pandemic was over.
Women (33%) were also less confident than men (25%) about retiring. Another 32% of women did not have an investment portfolio outside of super, compared to 17% of men.
Power noted the gender gap in superannuation and retirement was an issue before the crisis and would be exasperated once the country emerged from the recession.
“Women would benefit from further initiatives and incentives to make additional contributions to super to ensure they have adequate retirement savings. Specific measures include mandating super contributions on paid parental leave and removing the $450 per month threshold for superannuation to be paid,” she said.
“This will also improve the retirement savings adequacy for low-income earners and casual participants in the workforce who often hold multiple jobs, many of whom are women.”
The survey also found that 42% of Australians regularly checked their super balances, and 16% had started checking their balances more frequently since the pandemic began, increasing to 26% for those aged between 35 and 39.
However, 26% of respondents did not know what their super balance was or what fund it was in.
“It’s encouraging to see that that Australians recognise the importance of super as a savings vehicle for retirement and are showing higher levels of engagement,” Power said.