Retirees will be able to convert their superannuation into “lifetime income” with a market-first program by one of Australia’s big four banks.
AMP will on Monday launch its Lifetime Super Boost, which can be activated by all AMP Super members and creates a “concessional” balance “in the background”.
That balance uses the government-set deeming rate, which is currently 2.75 per cent, and is over time lower than the actual superannuation balance.
Upon retirement, pensioners can choose to move some of their superannuation into an AMP Lifetime Retirement Income account, and when they are assessed by Centrelink for the aged pension, that is done on the balance of the lower “concessional” amount invested into that fund, which could help retirees qualify for more pension.
In turn, pensioners may then draw more from their so-called Flexible Retirement Income account, AMP said.
It comes as AMP reports a heightened sense of anxiety before retirement, with some 54 per cent of Australians aged 58-60 reporting they “often feel stressed or overwhelmed”.
For Australians aged 61-65, half report feeling the same way.
As a result, too many Australians were uncertain about their retirement, including whether they had enough savings or how long they would last, AMP Growth and Customer Solutions Director Julie Slapp said.
“Australia has built one of the world’s strangest super systems,” she said.
“The unmet challenge is helping members confidently turn their super into income they actually use.
“This offering provides the confidence of income for life, the potential for higher income, and the guidance members need to make informed decisions.”
Ms Slapp said superannuation was “never meant to be just a balance on a screen”.
However, another area of focus for the bank is aged care support.
With an average wait time of 12 months for government aged care support, seven in 10 Australians aged over 65 worried about the cost of aged care, AMP found.
For people eligible for high-level in-home care, their income could increase by 20 per cent over two years and get ahead of the typical 10-12 month waiting period, according to the bank.
The fate of aged care patients has been in the spotlight in recent months, with some of Australia’s biggest states including NSW and Queensland complaining about bed block at public hospitals caused by elderly or NDIS patients stranded waiting for supports.
NSW Health Minister Ryan Park earlier this month said as many as 1200 beds were occupied across the state by those patients “equivalent of two busy and large hospitals in Sydney”.
The Albanese government has pledged to reform the aged care system as it seeks to make sweeping cuts to the NDIS.
