Ian Henschke, chief advocate for National Seniors Australia, has renewed calls for a universal pension scheme that isn't means tested.

"Review after review complains about older people failing to spend down their capital; they don’t blame the system, they blame the retiree. And then they wonder why no one’s listening," he told Savings.com.au.

"By setting income and asset limits which restrict you from first getting a pension, and second limiting your entitlement, it punishes you for having more."

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.

Update resultsUpdate
BankSavings AccountBase Interest Rate Max Interest Rate Total Interest Earned Introductory Term Minimum Amount Maximum Amount Minimum Monthly Deposit Minimum Opening Deposit ATM Access Joint Application TagsFeaturesLinkCompare
4.40% p.a.
5.75% p.a.
Intro rate for 4 months
then 4.40% p.a.
$980
4 months
$0
$250,000
$0
$0
Featured
  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
0.55% p.a.
Bonus rate of 4.95%
Conditions apply.
5.50% p.a.
$1,128
$0
$100,000
$1,000
$0
1.20% p.a.
Bonus rate of 4.20%
Conditions apply.
5.40% p.a.
$1,107
$0
$250,000
$1,000
$0
Featured
  • Earn up to 5.40% pa by depositing $1,000 in the previous month
  • No account fees
  • Easy access to your money
4.75% p.a.
5.35% p.a.
Intro rate for 4 months
then 4.75% p.a.
$1,001
4 months
$0
$249,999
$0
$0
Featured
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
0.50% p.a.
Bonus rate of 4.85%
Conditions apply.
5.35% p.a.
$1,097
$1
$50,000
$500
$1
  • Maximum Age - 24
0.10% p.a.
Bonus rate of 5.00%
Conditions apply.
5.10% p.a.
$1,044
$0
$250,000
$200
$0
Featured No monthly fees
  • Download the App to open your account
  • Get better visibility of your spending within App!
  • Deposit $200 per month to activate bonus interest
0.05% p.a.
Bonus rate of 4.95%
Conditions apply.
5.00% p.a.
$1,023
$1
$250,000
$20
$0
  • No fees or penalties for withdrawing money
  • Savings guaranteed up to $250,000
  • Maximise your savings and reach your goals faster with Auto-Savings
0.05% p.a.
Bonus rate of 5.45%
Conditions apply.
5.50% p.a.
$1,128
$0
$50,000
$1,000
$0
For customers aged 14-35 years
0.05% p.a.
Bonus rate of 5.30%
Conditions apply.
5.35% p.a.
$1,097
$0
$250,000
$1,000
$0
Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of . View disclaimer.

Mr Henschke's calls come after Superannuation Minister Jane Hume called to scrap the legislated increase in the superannuation guarantee in the Financial Review as it encourages retirees to hoard yet more cash instead of spend it.

Former Public Service Commissioner Andrew Podger has also called for the government to ensure retirees draw down on their savings.

Mr Podger recommended super funds offer annuities and home equity release programs such as reverse mortgages or pension loan schemes targeting deductions from deceased estates.

The draw-downs on deceased estates, as some describe as a form of 'death tax', further rocks retirees' confidence, according to Mr Henschke.

"When you have a system that relies so much on so many moving parts, it’s no wonder retirees are not confident and hold on to their money rather than spend it as they head towards the end of their lives," he said.

"And remember no one knows when that will be. It could tomorrow or in twenty-five years.

"If every year, you worry whether the market will give you enough or not, you have little choice but to be conservative.

"I’m sure many retirees feel this way, having lived through two of the biggest market downturns in recent history. It’s a terrifying financial rollercoaster you really don’t want to get on."

Australia is distinct among developed nations in that it's rare to find a defined benefit scheme.

For example, in a lot of cases in Canada, employers offer a defined pension scheme that might offer 2% as a multiple of years of service and annual salary, as an example.

Australian super funds and employers have largely done away with defined benefits schemes in the past 30 years. 

Having a defined benefits scheme, or universal pension, would give retirees the confidence to go out and spend, instead of hoarding cash and assets, according to Mr Henschke.

"That’s the beauty of a properly designed universal pension. It takes away the year-on-year risk but ensures it is fiscally sustainable and fair," he said.

Another potential benefit is that, like universal basic income, it cuts down on the administration costs of means testing. 

Superannuation already has a favourable tax environment, taxed at 15%, and the maximum basic rate for a single pensioner is $860.60 per fortnight. 

Photo by Vlad Sargu on Unsplash





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