Future generations might struggle in the lucky country
- MLC research reveals a third of Aussie parents believe their children won’t be able to live the same lifestyle as them
- Almost 1 in 5 Aussies will be relying on family inheritance to pay off their mortgage or to ensure their future financial security
- Over a third of Aussies believe they’ll be relying on the Australian government during retirement
As the debate around tax reform and superannuation continues, new research from NAB-owned wealth management provider MLC reveals Aussie parents are increasingly worried about the financial futures of their children.
The second part of a three-part whitepaper, Australia Today, shows one third of parents are concerned their children won’t enjoy the same standard of living as them.
The research, which surveyed more than 2,000 Australians, shows the cost of living, and the impact it will have on future generations, is a major cause for concern for many Aussies. Almost 60 per cent agreed the next generation will never own their own home.
Andrew Hagger, NAB Wealth Group Executive and CEO at MLC, believes there’s a lot of work to be done to help the nation feel more confident about the future.
“We know that maintaining our lifestyle and financial security are our top priorities for Australians. However, Australians are telling us they are worried.
“There has always been the expectation that future generations will do better than us. Yet these findings paint a different picture. It’s concerning to see so many people worried about how their children will afford their own homes and live a comfortable lifestyle,” said Mr Hagger.
The research shows Australians are also concerned about their own financial futures – with over half fearing they won’t be able to maintain their current lifestyle in 10 years’ time. Concerns over employment are front of mind, with a third of respondents worried about job security.
Keeping the finances flowing in retirement is also creating a sense of unease. Two in five Australians don’t believe they’ll be able to fund their current lifestyle after retiring. A further one in five indicated they’ll rely on family inheritance to pay off their mortgage or ensure their financial security.
The survey also found over half of those currently retired (53 per cent) are relying on the government. But interestingly, fewer Australians (44 per cent) who are transitioning to retirement believe they will rely on the government in retirement.
‘‘This trend demonstrates the potential of our superannuation system – to increase self-sufficiency in retirement – and it seems this is being realised by individuals, which can only be a positive for Australia.
“That is why it is more critical than ever the objectives of super are enshrined in law as swiftly as possible to avoid constant political tinkering and provide stability and certainly to all Australians,’ Mr Hagger said.
The research also unveiled those who use financial advisers or planners (27 per cent) were significantly less likely to say they would rely on the government in retirement. ‘Seeking quality financial advice can make a real difference for Australians as they save for retirement and I hope this research will help more people to think about their financial future,’ Mr Hagger said.
Other key findings included:
- Over a third of Australians agreed they were concerned about their job security – with those who have moved to Australia in the past four years significantly more worried about their job security (78 per cent) compared to those who have been in Australia for longer (32 per cent amongst those who have lived in Australia for more than a decade)
- Close to three in five (56 per cent) were concerned about being able to maintain their lifestyle in 10 years’ time – with those approaching or in retirement more worried than others
- 43 per cent believe they wouldn’t be able to fund their lifestyle when they finish working and think they will have to rely on the Australian government in their retirement
“Australia has a world-leading retirement savings framework, however too many Australians are facing a retirement savings shortfall or are not fully involved participants in the system.
“With over a third of Aussies expecting to depend on the pension during their retirement – it’s clear that a lot more needs to be done to help consumers be more confident towards their future and their retirement”, said Mr Hagger.
About the Australia Today whitepaper: MLC commissioned IPSOS to prepare a three-part whitepaper to explore the challenge of how to get more Australians to think about their retirement. Over 2,000 Australians participated in the research, which aims to provide a fresh look at attitudes and perceptions towards their financial security and standard of living in the future, and how they expect to live in retirement.
Part 1 and 2 of the whitepaper is now available to download from www.mlc.com.au/australia-today, with Part 3 available in coming months.
MLC is part of National Australia Bank’s wealth management division. NAB is committed to providing investment, superannuation, insurance and financial advice to our corporate, institutional and retail customers. We have one of the largest financial planning networks in Australia, providing quality financial advice, insights and expertise through NAB Financial Planning, MLC Financial Planning, MLC Advice, Godfrey Pembroke, Garvan Financial Planning, Apogee Financial Planning and Meritum.