Here in Australia, we’re lucky to have access to plenty of support and assistance in our old age. Not only are our employers required to help us build a healthy superannuation fund throughout our careers, we can also look forward to a government-funded pension in retirement.
But what about the rest of the world? How does the land down under stack up against Brits and Kiwis when it comes to preparing for and funding retirement? Do we need to step up, or are we leading the pack?
Under the Superannuation Guarantee Contribution (SGC), Aussie employers are required to make payments – the equivalent of 9.50 per cent of your gross salary into your chosen superannuation fund. And the SGC is on the rise. It will increase steadily over the next 8 years until it reaches 12 per cent.
Across the ditch, our cousins in New Zealand follow a government scheme called KiwiSaver, which runs a little differently. The employer contribution is only required if it’s matched by the employee – and the contribution is just 3 per cent, having increased from 2 per cent earlier this year.
The UK is currently rolling out a compulsory pension plan that will require employers and employees to contribute a minimum of 8 per cent of the employee’s salary to their pension each year. But, the scheme won’t be up and running until 2018.
Pensions have been a hugely controversial topic in the UK, with funding gaps leaving workers facing great uncertainty about their retirement. An ageing population, changes to the tax system and the global financial crisis have all conspired to blow big holes in public and private schemes.
Your average British worker would give their right arm for a national pension scheme like Australia’s super. Perhaps that’s why we ranked so highly on the 2012 Mercer Global Pension Index, placing third overall, behind only Denmark and the Netherlands.
Whilst there’s always argument for how we could be doing better, Australia’s superannuation scheme is certainly impressive by global standards. With this knowledge, why not think about ways you could be building your own retirement savings?
Did you know Australia had such a good deal with it came to super?