Australians have the largest retirement funding gap in Asia and the fourth biggest in the world, HSBC research says.
Australians expect their retirement to last about 23 years but they’re seeing their savings dry out after just 10 years.
The bank surveyed 16,000 people in 15 markets worldwide including 1,000 respondents in Australia to understand the issues associated with ageing populations and increasing life expectance globally.
With the benefit of hindsight, half of those already in retirement said they should have started saving at age 30. With the financial pinch settling in later in life, 31% said they had been forced to curb spending.
“Unfortunately for many retirees, their realisation is too little, too late. The Australians on their way to retirement must learn from the mistakes of those before them to avoid being hamstrung by a savings shortfall,” HSBC retail banking and wealth management boss Graham Heunis said.
Of the Australians surveyed 16% believed they would never be in the financial position to fully retire. That’s much higher than the 10% global average.
The biggest reason for negative retirement sentiment is Australia’s high cost of living, Heunis said.
“When you consider wage growth in Australia has slowed to 2.6% p.a. (the lowest rate of growth since 1981) it’s unsurprising Australians are struggling to afford retirement,” he said.
The research found that 44% of Australians admit to either inadequately preparing for retirement or not preparing at all (compared to an average of 38% globally).
The savings rates of Australians are among the worst globally with 53% of respondents flagging they have never saved specifically for retirement, or intend to start saving, outside of compulsory superannuation which is sitting at 9.5% of earnings. Around the world 39% of respondents said they had never saved for retirement.
“Australians are in denial about retirement planning. Being concerned is not enough – the next generation need to take action and start saving now,” Heunis said.
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