MLC has released their quarterly survey on wealth this morning.
While it is a wide-ranging survey, the thing that jumps out — at a time when the federal treasurer seems to be floating the idea of increasing the retirement age to 70 — is the high proportion of Australians who don’t think they will have enough to live on in retirement.
Indeed only 5% of Australians surveyed believe they will have “more than enough”.
That may sound like a somewhat esoteric, and possibly glass half-empty statistic.
But the importance of it can not be understated, because if people think they won’t have enough to retire on in 5, 10 or 20 years, it can impact on their spending and saving habits now.
So the related issue of most respondents seeing the natural consequence of this fear leading to a focus on debt repayment is not surprising.
What it does though, is make it harder for the RBA to really make monetary policy effective, and also explains why rates need to go all the way down to 2.5% to really get traction.
But the good news, as Glenn Stevens noted in a speech in 2009, is that once Australians are happier with their balance sheet position, they will start spending and consuming again.
There is evidence that this is already occurring in recent retail sales growth.