SEARCH
Age pension changes could encourage risky strategies
Age pension changes could encourage risky strategies
Changes to the age pension could encourage pensioners to embrace riskier investment strategies, according to new research from the University of Sydney.
Commenting on the recent changes, University of Sydney Business School Professor Susan Thorp said new means testing arrangements "are likely to encourage wealthier pensioners to spend their savings more quickly than they otherwise would have and take on more financial risk".
"Historically, wealthier pensioners affected by the assets test spend their savings at significantly faster rates than full pensioners," she said.
"This is partly because less wealth means a higher pension for this group. Recent changes encourage better-off retirees to use up their nest eggs faster, rather than preserve and pass their wealth on."
Additionally, Ms Thorp said higher risk assets will "look a little more attractive" to some pensioners.
"The new asset test means that the pension compensates for financial losses at a higher rate than previously. If assets fall by $1,000, the pension rises by $78 compared to $39 previously," she said.
The changes to the age pension means testing arrangements came in to effect as of 1 January 2017.
Subscribe to our Newsletter
We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians
Your email address will be shared with nestegg and subject to our Privacy Policy
latest articles
OUR PLATFORMS AND BRANDS
- Accountants Daily
- Accounting Times
- Adviser Innovation
- Australian Aviation
- Broker Daily
- Cyber Daily
- Defence Connect
- Fintech Business
- HR Leader
- Independent Financial Adviser
- Investment Centre
- Investor Daily
- Lawyers Weekly
- Money Management
- Nestegg
- Property Buzz
- Real Estate Business
- Smart Property Investment
- SMSF Adviser
- Space Connect
- Super Review
- The Adviser
- Wellness Daily
- World of Aviation
EVENTS AND SUMMITS
- ACE25 The Accounting Conference and Exhibition
- Adviser Innovation Summit
- Australian Accounting Awards
- Australian AI Awards
- Australian Aviation Awards
- Australian Aviation Summit
- Australian Broking Awards
- Australian Cyber Awards
- Australian Cyber Summit
- Australian Defence Industry Awards
- Australian Law Awards
- Australian Law Forum
- Australian Space Awards
- Australian Space Summit
- Australian Wealth Management Awards
- Australian Wealth Management Summit
- Better Business Awards
- Better Business Summit
- Broker Innovation Awards
- Broker Innovation Summit
- Budget Summit
- Commerical Finance Awards
- Corporate Counsel Summit
- Defence & National Security Workforce Awards
- Fund Manager of the Year Awards
- ifa Excellence Awards
- Lawyers Weekly 30 Under 30 Awards
- New Broker Academy
- Partner of the Year Awards
- Partner Summit
- REB Awards
- Rising Star Awards
- SME Bootcamp
- SMSF Technical Strategy Day
- Super Fund of the Year Awards
- Women in Finance Awards
- Women in Finance Summit
- Women in Law Awards
- Women in Law Forum
LEARNING AND EDUCATION
MOMENTUM MARKETS NETWORK
LINKS
STAY CONNECTED
Subscribe to the Adviser Innovation eNewsletter.
