The federal government has identified the need to encourage individuals to find better ways to use their superannuation savings as a key area of focus in the coming years.
Speaking at the Council on the Ageing Australia National Policy Forum 2021: Retirement Incomes in Canberra recently, Superannuation, Financial Services and the Digital Economy Minister Jane Hume said: “How do we help people to have the confidence to help people to use their superannuation more efficiently to focus on planning their income streams as opposed to just their balances?”
She pointed out though that this aim cannot be achieved through the efforts of the government alone.
“We all have roles to play here. The private sector can better innovate and develop flexible products, an area that we’re seeing a significant uptick in … as well as providing advice, guidance and information,” Hume noted.
“And the government needs to create an environment that encourages that market to develop retirement income products and provide guidance to deliver those outcomes for members.”
However, the minister confirmed the government’s approach to the issue would always facilitate flexibility.
“We need to be clear: under a Morrison government these products will never be prescriptive. It’s not about forcing retirees, whether they be current or future, to draw down their savings through rigid policy settings that restrict choice and restrict agency,” she noted.
“This is about navigating the barriers that are preventing people from doing so right now, which, more often than not, come down to fear and inaccessibility.”
According to Hume, the shifting demographic of the Australian population and its effects on the interaction with people and their retirement savings is making the need to address this issue increasingly urgent.
“Very soon we’re going to hit a tipping point [where] we’ll soon have as many dollars in the decumulation phase as we do in the accumulation phase,” she acknowledged.''