Survey findings released today revealed 23% of Australians aged 30-65 say they will be forced to delay retirement because of COVID-19.
Those findings come from a survey commissioned by Colonial First State in June on over 1,000 respondents, and found nearly half (45%) of Australians are "scared" or do not feel financially confident about retiring.
However, most over the age of 55 are still confident they can retire as planned.
The findings coincide with the Productivity Commission reporting young people's incomes have fallen by 1.6% per year between 2008 and 2015, while those aged 35-64 had their incomes increase 1.6% per year.
Colonial First State general manager Kelly Power said the pandemic has created a huge "wake up call" for people in their prime working age.
“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," she said.
Women also reported feeling more uneasy than men about retirement, with a third of women not feeling confident about retiring, as opposed to a quarter of men.
A third of women also reported not having an investment portfolio outside of super, as opposed to just 17% of men.
Ms Power said this gender gap was a "real issue".
"[It] sees women financially disadvantaged in retirement. It was an issue before the current crisis, and it will be an even bigger problem when we emerge from the recession," she said.
Need somewhere to store cash and earn interest? The table below features introductory savings accounts with some of the highest interest rates on the market.
*Data accurate as at 21 September 2020. Rates based on a savings balance of $10,000. Sorted by total interest rate. Refer to providers' websites for bonus rate conditions. Note that the base rate will apply once the introductory term has passed.
Building up a savings buffer
In the survey, 34% also reported saving less than usual because of a loss in income or increase in bills, while half are planning to change their lifestyle financially after the pandemic.
Women are more willing to reduce spending than men (53% vs 46%).
Just over a quarter of Australians aged 35-29 reported checking their super balances more regularly during the pandemic.
Colonial First State has urged workers to see what government support they might be eligible for, including the low-income super tax offset, in which the government pays up to $500 per year to offset tax on concessional super contributions.
This payment happens automatically for those earning less than $37,000.
Workers earning less than $52,697 making after-tax super contributions may also be eligible for a matching contribution from the government up to a maximum of $500.
- Josh Frydenberg wants to make it easier for you to get a home loan
- Illawarra Credit Union introduces a sub-2% home loan
- Average renovation costs $86,000 less than minimum $150k HomeBuilder criteria
- JobSeeker cut from today: What you need to know
- Workers spent $1,138 on average to set up WFH stations