Pension changes crash retirement plans
Investors are scrambling to fix their dwindling financial position and retirement plans, and taking on more investment risk to make up shortfall after the asset test changes to the Age Pension, according to Trilogy Funds.
Under the new asset test, a couple with a house and assets of $375,000 are entitled to the full pension of $34,000 while those with assets of $816,000 would receive nothing.
Trilogy managing director, Philip Ryan, said the changes meant thousands would be left with no retirement plan, and had “had the rug pulled out from underneath them”.
“When the goal posts shift so dramatically and so suddenly it will inevitably cause significant difficulties for thousands of people,” Ryan said.
“Retirement income is something most people plan for over many, many years.”
Australians would now be forced to entirely re-evaluate their post-work life and from an income point of view, could be $34,000 worse off.
“The biggest issue we’re seeing from our clients is that many are having to consider taking on more investment risk in their portfolio to make up the shortfall in income,” Ryan said.
“To make such a significant change in such a short space of time is deeply unfair to the thousands of people who planned for their retirement based on a set of rules.”
While family homes were exempt from the asset test, significant overall asset wealth would be needed to secure a full pension, and depended on other assets totalling less than $375,000.
Ryan said Australians had worked hard to earn their retirement savings, and would now have to compromise on standards of living.
“I would hope that’s not the message the government is trying to send to hardworking Australians,” he said.
“[They] have painstakingly put together a nest egg to fund their retirement.”
AUTHOR
Hope William-Smith
Recommended for you
The merger with L1 Capital will “inject new life” into Platinum, Morningstar believes, but is unlikely to boost Platinum’s declining funds under management.
More than half of the top 20 most popular shares bought by advised investors during the first half of 2025 were ETFs, according to AUSIEX data.
At least two-thirds of ETF flows are understood to be driven by intermediaries, according to Global X, as net flows into Australian ETFs spike 97 per cent in the first half of 2025.
Inflows for the first half of 2025 for GQG Partners stand at US$8 billion, but the firm has flagged fund underperformance could be a headwind for future flows.
