Super savings should be a national priority: NAB unit MLC

Nearly half of Australians are living from pay cheque to pay cheque yet many want to retire early, an MLC study shows.

MLC general manager of corporate superannuation Lara Bourguignon. Picture: Britta Campion

Almost half of Australians are living from pay cheque to pay cheque yet many want to retire early while maintaining their standard of living, says Lara Bourguignon, general manager of corporate superannuation at National Australia Bank’s wealth arm, MLC.

“Australians have changed their spending habits over the last 20 or 30 years since the compulsory superannuation system began,” Ms Bourguignon told The Australian.

She was commenting on a new “white paper” to be released today by MLC, called Australia Today, which shows Australians regarded spending on international travel, eating out, technology and even private schools as being a normal part of their lifestyle.

“Some 85 per cent of those surveyed for the report believed that Australians nowadays were living beyond their means,” she said.

“Yet most saw early retirement as one of their aspirations. We need to take these aspirations into account when considering the ­objectives of our superannuation system.”

The survey — on how Australians were thinking about their retirement — of more than 2000 people showed that almost half believed a person needed an annual income of $150,000 a year to live comfortably.

Some 60 per cent believed that having $1 million in Australia did not mean a person was rich.

Most of the people surveyed believed the cost of living in Australia was much higher than the cost of living 10 years ago, with some 60 per cent opting to shop at discount stores such as Aldi and Costco to save money.

The report also showed that 46 per cent of those surveyed were living from pay cheque to pay cheque to afford their lifestyle, including 27 per cent of people earning $150,000 to $199,000 a year and 22 per cent of those earning more than $200,000 a year.

More than 70 per cent of householders surveyed had some level of debt.

Almost half of those surveyed believed the government should do more to help middle class families.

“When you look at the insights into the way people are living their lives, it shows we need to save more for retirement,” Ms Bourguignon said.

“We need long-term settings for our superannuation system to make sure we get the right outcomes.

“Australians have ridden this wave of social mobility and economic prosperity, but we all recognise that it is not going to continue.”

The survey, conducted for MLC by IPSOS, showed that most people regarded themselves as being middle class or lower middle class, with only 27 per cent describing themselves as being working class.

Those perceiving themselves as being middle class included people with household earnings of more than $200,000 a year.

NAB wealth group executive and MLC chief executive Andrew Hagger said the survey showed that Australians were “confused” by their social standing.

He said there needed to be a fresh look at how Australians were actually living their lives and how they expected to live in their retirement. “Helping more Australians save for their retirement should be a national priority,” he said.

“But with almost one in two Australians saying they are living pay cheque to pay cheque we’ve got to ask ourselves if we’ve got the settings right to achieve that aim.”