Lower contribution caps hit retirement adequacy
New data released by AMP has confirmed the adverse impact of the Federal Government having lowered superannuation concessional contribution caps.
The latest AMP Retirement Adequacy Index, released this week, has pointed to a significant fall-out in salary sacrifice contributions, particularly among the older Australians more likely to put more into superannuation as they approach retirement.
In fact the Index said that the retirement adequacy of working Australians had fallen to its lowest level since the global financial crisis, declining two percentage points to 69.4 per cent, while projected retirement savings fell 7 per cent to $492,000.
It said superannuation was a major driver of the falls, with the average worker's total superannuation contributions falling to the lowest levels since the Index began in 2006 - 12.3 per cent of salary compared to 12.6 per cent as at 31 December, 2006.
The index analysis said this was mainly due to a fall in voluntary contributions.
Commenting on the Index, AMP Financial Services managing director Craig Meller said the drop in voluntary contributions, market volatility and ongoing subdued investor sentiment were impacting overall retirement adequacy, and had the potential to adversely affect the future retirement lifestyles of Australians.
"The index shows salary sacrifice contributions have fallen across most age groups, particularly for older Australians who traditionally put more into their superannuation as they approach retirement, but are now restricted by caps on voluntary superannuation contributions or worried about global markets," he said.
Deloitte Access Economics partner Chris Richardson said the research had shown the impact on future Governments that the combination of an ageing population and a drop in overall superannuation contributions might have.
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