Half of new retirees face pension adversity: ISA
Industry Super Australia (ISA) has weighed into the Government's pension changes, claiming that within 10 years 50 per cent of new retirees will find themselves being adversely affected.
In doing so, the industry funds lobby group has urged people who find themselves struggling as a result of the changes to let their families, local MPs or community organisations know.
Timing its analysis to coincide with the implementation date of the new pension regime, ISA said that older Australians would understand what the Government's pension changes actually mean for them, with the first payments under the new assets test due from this week covering period from 31 December 2016 to 13 January 2017.
It said that around 325,000, mostly low to middle-income people, would be immediately worse off and that ISA modelling predicted that in 10 years, 50 per cent of new retirees would be adversely affected.
ISA public affairs manager, Sarah Saunders said the Government's policy assumed retirees could earn 7.8 per cent on the top portion of their savings, but this was unrealistic in a low interest rate environment.
"If someone with modest savings on the assets test threshold ends up living off less than the full Age Pension, there is no incentive to save," she said.
"Faced with sudden changes to retirement income policy, Australians working to long-established plans can be forgiven for feeling under attack."
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