Retirees set to convert super into ‘lifetime income’ with major bank’s new program
Retirees will be able to turn their pension into a “lifetime income” with a market-first program from one of Australia’s big four banks.
On Monday, AMP will launch Lifetime Super Boost, which can be activated by all AMP Super members and creates a “privileged” balance “in the background.”
This balance uses the government-set loan interest rate, which is currently 2.75 percent and will become lower than the actual retirement balance over time.
Upon retirement, pensioners can choose to transfer some of their pension into the AMP Lifetime Pension Income account, and when being considered by Centrelink for the aged pension this is done on the balance of the lower ‘concession’ amount deposited into that fund, which can help pensioners qualify for more pensions.
In return, retirees will be able to withdraw more money from their Flexible Retirement Income accounts, AMP said.
This comes at a time when AMP is reporting increased feelings of anxiety ahead of retirement; About 54 per cent of Australians aged 58-60 reported feeling “mostly stressed or overwhelmed”.
Half of Australians aged 61-65 say they feel the same way.
AMP Director of Growth and Client Solutions Julie Slapp said as a result many Australians were uncertain about their retirement, including whether they had enough savings or how long they could last.
“Australia has built one of the strangest supersystems in the world,” he said.
“The unmet challenge is to help members safely convert their pensions into income they actually use.
“This offering provides lifetime income security, higher income potential, and guidance members need to make informed decisions.”
Ms Slapp said the pension was “never just meant to be a balance on the screen”.
However, another area the bank focuses on is elderly care support.
AMP found seven in 10 Australians over the age of 65 are concerned about the cost of aged care, with an average wait time for government aged care support of 12 months.
According to the bank, incomes for people eligible for in-home senior care could increase by 20 percent within two years, avoiding the typical 10-12 month waiting period.
The fate of aged care patients has been under the spotlight in recent months; Some of Australia’s largest states, including NSW and Queensland, have complained of blockages of beds in public hospitals due to elderly or NDIS patients waiting for support.
NSW Health Minister Ryan Park said earlier this month that up to 1,200 beds across the state were occupied by these patients, “the equivalent of two busy, large hospitals in Sydney”.
The Albanian government has promised to reform its aged care system with a view to making sweeping cuts to the NDIS.
