The 2026 Intergenerational Report has confirmed the growing dividend from Australia’s superannuation system, with Australians projected to retire with significantly higher balances, greater financial independence and less reliance on the Age Pension.
The report projects the share of Australians at or above Age Pension age receiving a pension or other income support will fall from 66 per cent in 2025–26 to 52 per cent by 2065–66, meaning almost half will receive no pension or income support. Treasury attributes the shift to the continuing maturation of the superannuation system.
ASFA CEO Mary Delahunty said the findings showed compulsory super was doing exactly what it was designed to do.
“The report shows super working in the way Australians need it to work: giving people more money of their own and greater independence in retirement,” Ms Delahunty said.
“For millions of Australians, their super will be the difference between relying heavily on government support and having the savings to make their own choices about the life they want to live in retirement.”
Despite the number of Australians over Age Pension age being projected to double to around nine million by 2065–66, spending on Age and Service Pensions is projected to fall from 2.3 per cent to 1.8 per cent of GDP.
Treasury projects Australia’s public pension expenditure will fall by 0.5 percentage points of GDP over the next 40 years. By contrast, average public pension expenditure across OECD countries is projected to rise by 1.5 percentage points, with Australia projected to have the lowest public pension expenditure in the OECD as a share of GDP in 2060.
“That is a remarkable result for an ageing country,” Ms Delahunty said.
“More Australians will be able to support themselves with money they have built up over their working lives, while taking pressure off the taxpayers who would otherwise have to fund a much larger pension bill as our population ages.”
“That matters enormously for younger Australians. A stronger super system means we can support an ageing population without simply passing an ever-growing retirement bill to the generations that follow.”
Treasury says superannuation will increasingly become the primary source of retirement income for many Australians as the system matures, reducing reliance on the Age Pension.
Ms Delahunty said the findings were also a reminder of the importance of preserving super for its legislated purpose: providing income in retirement.
“Super is Australians’ money, put aside during their working lives so they can have greater financial security when they retire.”
“Today’s report shows why preserving that money matters. The more we allow super to do its job, the more Australians retire with savings of their own, the less they need to rely on the pension and the more sustainable our retirement system becomes.”
“At a time when Australia is confronting the costs of an ageing population, we should be very careful about weakening one of the policies that is demonstrably helping us meet that challenge.”
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About ASFA
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry, and the only industry body that represents all parts of the APRA-regulated system.
Our more than 100 members include retail, industry, corporate and public sector funds and their service providers. For over sixty years, ASFA has been the voice of super, advocating for a dignified retirement for all Australians. Through research, advocacy and collaboration, ASFA promotes efficiency, sustainability and trust in Australia’s world-class retirement income system.