Australia funds retirement mainly through compulsory saving: superannuation, fed by 12% of wages, holds A$4.8 trillion, while the public pension, reserved for people with modest incomes and assets, costs only about 2.3% of GDP — an envied model, but one whose tax breaks benefit the better-off first.
Key points
- Private pensions outweigh the public pension in Australia (4.5% versus 3.4% of GDP in 2022, OECD).
- Treasury projects the cost of the Age Pension to fall from 2.3% to 1.8% of GDP by 2066 as retirement savings mature.
Citoyen synthesis for the Pensions category in Australia. Grounded in sector data (Treasury, APRA, ATO, Services Australia, OECD) and reference analyses (2026 Intergenerational Report). All values are the latest available realised observation — never a forecast; projections are presented as such. Assessments are distinguished from sourced facts. Data last updated: November 2026.
1. Current situation — where Australian pensions stand
Three pillars. The system rests on (1) the Age Pension, tax-funded and paid subject to income and assets tests from age 67; (2) superannuation, compulsory retirement saving paid by employers into private or industry funds, accessible from 60 (the "preservation age") once working life is over; (3) voluntary saving, encouraged through the tax system. The compulsory contribution (Super Guarantee) has stood at 12% of wages since 1 July 2025, the end point of a rise that began at 3% in 1992.
Low public spending, a massive private tier. According to the OECD SOCX database, public old-age pensions (cash benefits) amounted to 3.4% of GDP in 2022, and private pensions to 4.5% of GDP — one of the few countries where private exceeds public. This OECD scope is not Eurostat's (ESSPROS): the two measures must not be confused. According to Treasury, the Age Pension costs about 2.3% of GDP.
A A$4.8 trillion pool. According to the prudential regulator APRA, superannuation assets reached A$4,767 billion at end-June 2026, up 9.5% over a year, of which A$1,107 billion in self-managed funds (SMSFs) — more than one and a half times the country's GDP. Most retirees nevertheless combine a full or part Age Pension with their savings.
The level of the public pension. Since the six-monthly indexation of 20 September 2026, the maximum Age Pension stands at A$1,237.70 a fortnight for a single person (supplements included) and A$1,866 for a couple (Services Australia). On the same day, the "deeming" rates — the notional return attributed to savings in the income test — were raised by 0.5 point, to 1.75% and 3.75%, which reduces the pension of some retirees with savings.
An exit age close to the statutory age. The average effective age of labour market exit reached 64.9 for men and 64.4 for women in 2024 (OECD), slightly above the European average but below the Age Pension age, as superannuation makes it possible to leave before 67.
2. Outlook — where pensions are heading
Slower ageing than elsewhere. People aged 65 and over make up about 18% of the population (18.1% in 2025 according to World Bank estimates), a lower share than in Europe or Japan thanks to sustained immigration. According to the Intergenerational Report published by Treasury in September 2026, the number of people above Age Pension age would almost double, to around 9 million, by 2066.
A public pension set to shrink. The same report projects the cost of the Age Pension to fall from 2.3% to 1.8% of GDP by 2066, as more retirees will have superannuation accounts built up over a full career; superannuation drawdowns would rise from 2.5% to around 6% of GDP. These are projections: the Centre for Independent Studies, among others, considers 40-year forecasts fragile and points out that superannuation itself relies on large tax concessions.
Two reforms in force since 1 July 2026. (1) Payday Super: employers must pay contributions at the same time as wages, rather than quarterly, to reduce unpaid super. (2) Division 296: an additional 15% tax now applies to the share of earnings attributable to balances above A$3 million, with a second tier above A$10 million (ATO). The measure, reworked in October 2025 after the controversy over taxing unrealised gains, aims to limit the use of superannuation as an estate-planning tool.
The debates. Turning accumulated savings into a regular income ("retirement income") is the next task, as most retirees withdraw their capital or consume only the earnings. Gaps in balances between men and women, linked to part-time work and career breaks, remain large; super has been paid on government paid parental leave since 1 July 2025. Finally, housing — retirees who rent being the most exposed to poverty — weighs on the adequacy of the system.
3. International comparison — Australia among its peers
Set among its peers, Australia is the archetype of the targeted public pension plus compulsory saving model, the opposite of continental Europe's pay-as-you-go systems.
Three takeaways. (1) Among the lowest public spending. At 3.4% of GDP (OECD SOCX, 2022), it is close to Korea (3.8%), but half that of the United Kingdom (7.1%) or the United States (7.3% in 2023), and a quarter of France's (13.4%).
(2) Among the heaviest private tiers. With private pensions worth 4.5% of GDP (2022), Australia ranks behind the United States (5.7%) but ahead of Canada (3.5%), the United Kingdom (2.9%) and far ahead of France (0.25%), where public pay-as-you-go dominates.
(3) Later exits than in France. Australians leave the labour market about three years later than the French (64.9 versus 61.9 for men in 2024), but earlier than Americans or Koreans.
International comparison — pensions
| Country | Public pensions (% of GDP, OECD SOCX) | Private pensions (% of GDP, SOCX) | Exit age M / F (2024) |
|---|---|---|---|
| United Kingdom | 7.1% (2022) | 2.9% (2022) | 63.8 / 63.1 |
| United States | 7.3% (2023) | 5.7% (2022) | 67.3 / 66.7 |
| Canada | 5.9% (2022) | 3.5% (2022) | 65.2 / 63.2 |
| South Korea | 3.8% (2022) | 1.2% (2022) | 67.4 / 69.6 |
| France | 13.4% (2022) | 0.25% (2022) | 61.9 / 62.4 |
| Australia | 3.4% (2022) | 4.5% (2022) | 64.9 / 64.4 |
Sources: OECD SOCX (old-age cash pensions, public and private, latest year available per country), OECD Pensions at a Glance (effective age of labour market exit). The SOCX scope differs from Eurostat ESSPROS: the French figure in this table is not that of the Eurostat card.
Data used (data-journalism base)
Show the table
| Data | Value | Source |
|---|---|---|
| Public pension spending (old age) | 3.4% of GDP (2022) | OECD SOCX (Citoyen card) |
| Private pensions | 4.5% of GDP (2022) | OECD SOCX (Citoyen card) |
| Effective age of labour market exit | men 64.9 · women 64.4 (2024) | OECD Pensions at a Glance (Citoyen card) |
| Age Pension age | 67 (superannuation accessible from 60) | Services Australia |
| Compulsory contribution (Super Guarantee) | 12% of wages (since July 2025) | ATO |
| Superannuation assets | A$4,767 billion (end-June 2026, +9.5% over a year) | APRA |
| Maximum Age Pension (single) | A$1,237.70 a fortnight (September 2026) | Services Australia |
| Cost of the Age Pension | 2.3% of GDP; projected 1.8% in 2066 | Treasury, 2026 Intergenerational Report |
Sources (national analyses and references)
Australian Treasury (2026 Intergenerational Report) · APRA (quarterly superannuation statistics, June 2026) · Australian Taxation Office (Super Guarantee, Payday Super, Division 296) · Services Australia (Age Pension, September 2026 indexation) · OECD (SOCX, Pensions at a Glance) · World Bank · Super Members Council, Centre for Independent Studies · press (ABC, SBS, Australian Financial Review).
Methodological note — the synthesis distinguishes sourced facts from assessments, remains neutral, dates every figure, and does not extrapolate beyond its sources. International comparisons use a single source (OECD SOCX, OECD Pensions at a Glance); Intergenerational Report projections are presented as projections. Same safeguards as the rest of the observatory.