Middle and lower income earners have benefitted most from Australia’s A$4.1 trillion (US$2.7 billion) superannuation system over the last 20 years and were about $20,000 a year better off, according to research from a peak industry body.
This was one of the findings of the Super Members Council’s (SMC) The Retirement Revolution Super's Coming of Age report, the first of three reports in 2025 on how the retirement system is working for Australians.
SMC Executive General Manager Strategy & Insights Matt Linden said the key beneficiaries of the 33 year old mandatory super system were middle and lower income earners, those sitting in the middle of the retired population based on wealth distribution, who had benefitted from super during their working lives.
He said their incomes had increased more over the last two decades than those in the highest wealth quintile in dollar and relative terms and now stood at just over $1,000 a week, or about 80% of median earnings.
The share of Australians relying on government income support had also fallen dramatically over this period and would continue to fall.
“As super balances continue to increase, those proportions who are reliant on the age pension will reduce quite dramatically,” Linden said on a webinar.
Without the super system, 500,000 more people would receive and rely on the age pension, outlays would be $12 billion a year higher and average incomes would be about $8,700 a year lower.
“If governments were to try and deliver those sorts of improvements in income through the age pension, those numbers would be astronomical,” Linden said.
The position of the wealthiest had not changed to significantly or to the extent of the lower income groups over the last 20 years but they held more in financial assets than in other forms like property.
But Linden said not everyone was benefiting equally from the Australian retirement income system with many retirees, particularly renters, single people and those who retire involuntarily, showing lower incomes than other groups.
The SMC represents 22 profit-to-member funds with A$1.6 trillion under management for about 12 million members.