Australians' trust in superannuation continues to diminish despite it generating around 45 per cent of retirement income, the latest Mercer Superannuation Sentiment Index has revealed.
Findings showed that only 44 per cent rated trustworthiness of their fund as very good or excellent, with younger Australians even less confident, giving a score of just 37 per cent.
Business Leader of Mercer's outsourcing business for the Asia Pacific David Anderson said, superannuation would always be a relatively low-engagement product earlier in life, which was why the superannuation industry needed to innovate with new products, whole-of-life investment options and encourage younger members into high growth investment strategies early.
The Index showed that the number of working Australians rating superannuation as either a poor or fair way to save for retirement increased from 17 to 35 per cent in the 12 months to July 2009. Those who saw superannuation as a good, very good or excellent way to save for retirement however, fell from 80 to 62 per cent.
It was also revealed that nearly one in five working Australians were unsure of the tax effectiveness of super, that nearly one in four didn't know what investment option their super was in and that 74 per cent of those over 50 expected not be financially comfortable in retirement.
"Australians have to draw on their super until the day they die - not the day they retire - yet Australians ability to prepare for retirement is diminishing despite increased awareness as a result of the global financial crisis and an ageing population," Anderson said.
"More than two in three working Australians over 50 will struggle financially in retirement according to these research findings, but this could potentially be avoided with better preparation."
Survey findings were compiled through an online survey of 1025 full time working Australians aged 25 to 65 and was conducted in July 2009.
