Australians struggle to navigate super and age pension divide

Australians are approaching retirement with growing uncertainty about how superannuation and the Age Pension will work together, with new research pointing to gaps in both preparedness and confidence.

Research commissioned by Rest found 43% of members were unsure the steps they needed to take to prepare for life after work, while 61% supported greater integration between super funds and Centrelink to simplify access to the Age Pension.

The findings come as 2.7 million Australians ages 65 and over rely on the Age Pension, including around two-thirds receiving the full rate and one-third receiving a part pension.

Rest chief executive Vicki Doyle said the findings highlighted a disconnect between the two major components of Australia's retirement system.

"Superannuation and the Age Pension are meant to work together, but too often people are left trying to bridge the gap between them," said Doyle.

"When people don't know what steps to take as they approach retirement, it's a warning sign that the two biggest parts of Australia's retirement system aren't working together as seamlessly as they should."

Members aged between 46 and 66 were most likely to describe the retirement system as complex, while women and renters reported lower levels of preparedness. Almost two thirds of renting members said they were unclear how to prepare for retirement, compared with around one third of homeowners.

The findings coincide with separate research from MLC, which found only 31% of Australians believe they will be able to retire when they want to, highlighting the broader impact of retirement uncertainty throughout working life.

MLC Super chief executive Dave Woodall said retirement confidence was increasingly influencing employee wellbeing and workplace experiences.

"Over recent years, it's become clear that retirement confidence doesn't sit neatly at the end of a career, it's built over a working life. And when confidence is missing, the effects start to surface in how people feel, engage and make decisions about work," Woodall said.

"For employees, that framing matters. It shapes how supported they feel at work today, and whether they believe their employer is thinking beyond the immediate."

The report also reveals shifting expectations around financial wellbeing, with 84% of Australians believing that employers should provide access to free or subsidised financial advice.

Rest has called for greater integration between super funds and government services, alongside progress on the Delivering Better Financial Outcomes reforms to give funds greater scope to provide practical retirement guidance.

Doyle said the system needed to do more of the work for Australians approaching retirement.

"People shouldn't have to become experts in superannuation, the Age Pension and Centrelink just to plan for retirement," she said.