One of Australia’s big four financial institutions, AMP, is set to launch an industry-first initiative on Monday that will allow retirees to convert their superannuation savings into guaranteed lifetime income, addressing widespread uncertainty among older Australians approaching their post-work years.
The new product, named Lifetime Super Boost, is available to all existing AMP Super members. The program operates by creating a special concessional balance behind the scenes of a member’s account, which is calculated using the federal government’s official deeming rate — currently set at 2.75%. Over time, this concessional balance falls below the member’s actual total superannuation balance.
When members reach retirement age, they have the option to transfer a portion of their super savings into an AMP Lifetime Retirement Income account. When Centrelink assesses eligibility for the government aged pension, the assessment is based on the lower concessional balance rather than the full value of the investment. This structure can potentially help retirees qualify for a larger government pension payment, while also allowing them to draw additional income from their separate Flexible Retirement Income account, according to AMP’s explanations of the program.
The launch comes amid new internal data from AMP highlighting severe anxiety among Australians nearing retirement. The firm’s research found that 54% of Australians aged 58 to 60 report frequent stress or overwhelm around their retirement planning, with the same share — 50% — of 61 to 65-year-olds reporting identical negative feelings.
Julie Slapp, AMP’s Director of Growth and Customer Solutions, noted that too many working Australians approaching retirement remain uncertain about the adequacy of their savings and how long their funds will last through their retirement years. “Australia has built one of the world’s strangest super systems,” Slapp explained. “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.” Slapp added that superannuation was “never meant to be just a balance on a screen”.
Beyond retirement income products, AMP’s research also shines a new light on widespread concerns over aged care costs across Australia. The survey found that seven in 10 Australians over the age of 65 worry about how they will afford aged care support, as the national system currently faces an average 12-month wait for government-funded aged care services. According to AMP, for retirees eligible for high-level in-home care, the new structure could boost their total annual income by as much as 20% over two years, while helping them navigate the long waiting period for public aged care services.
The issue of aged care access has become a high-profile political issue in Australia in recent months. Major populous states including New South Wales and Queensland have repeatedly raised alarms over hospital bed blocking, a crisis where public hospital beds are occupied by elderly patients and National Disability Insurance Scheme (NDIS) recipients who cannot access appropriate community or aged care supports after treatment. Earlier this month, NSW Health Minister Ryan Park revealed that as many as 1,200 public hospital beds across the state are taken up by these patients — a number he said equates to the entire capacity of two large, busy Sydney hospitals.
On the federal level, the Albanese government has made reform of the aged care sector a key policy priority, while also pursuing major cost-cutting changes to the NDIS program to address long-term budget pressures.