Australia is currently facing a $1 trillion retirement savings shortfall and it is something that needs to be urgently addressed by the Federal Government, according to the Financial Services Council (FSC).
Releasing new research on the retirement savings gap this week ahead of a roundtable called by the Minister for Financial Services, Bill Shorten, FSC chief executive John Brogden said that while lifting the superannuation guarantee to 12 per cent was helpful, it would not solve the gap for the current workforce.
He called on the Government to address the policy issues, arguing that extending work lives would make a dramatic impact.
He said the FSC's Longevity Savings Gap Report had modeled the shortfall in retirement savings for those working Australians who live longer than average life expectancy.
Brogden said the report had demonstrated that the shortfall in retirement savings was substantial, and those who lived longer than life expectancy would place greater pressure on the age pension and the health system.
The key findings of the FSC report were that:
* The total retirement savings shortfall (including the average Australian who lives past life expectancy) is $1.063 trillion.
* The shortfall in retirement savings for those who outlive 90 per cent of their peers is $1.227 trillion.
On the question of extending working lives, Brogden said the FSC's research had shown that for every additional year Australians worked, the national superannuation savings gap was reduced by $200 billion.