Workers saved an average of 15% of their income for retirement in 2023, according to a global report just released by Natixis Investment Managers.
This level of savings represented an increase on 2021, when workers saved an average of 12%.
In 2019, the average was 15%.
The decrease in 2021 may reflect the impact of the pandemic.
Many people lost their jobs or worked fewer hours in 2020 and 2021 due to lockdowns in most countries.
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Generational differences in retirement savings
The report found that the portion of income saved for retirement between 2019 and 2023 differed between the generations.
The baby boomers, who were born between 1946 and 1964, saved 15% of their income in 2019, 13% in 2021, and 15% in 2023.
Generation X, who were born between 1965 and 1980, saved 15% of their income in 2019, 10.5% in 2021, and 15% in 2023.
The only generation that consistently increased their level of savings over the period was the millennials.
Born between 1981 and 1995, they saved 10% of their income in 2019, 13% in 2021, and 15% in 2023.
In Australia, superannuation is the main way workers save for their retirement.
Superannuation was introduced in Australia in 1992. The mandatory contribution rate for employers has risen from 3% in 1992 to 11.5% today.
Superannuation provider Vanguard says more needs to be done in Australia to engage millennials in their retirement planning.
Sara Dix, Vanguard Australia's Head of Public Policy, said:
Outside of the family home, superannuation is usually the second-biggest asset for Australians. Yet, while most are clear on their mortgage interest rate down to the second decimal point, the same can't be said of superannuation balances or fees.
Worryingly, our research also found that retirement literacy and retirement confidence are low amongst the younger generations.
Vanguard research shows 37% of millennials have no clear plan for retirement.
Other findings included that 40% of millennials don't know what they pay in superannuation fees.
Also, 41% do not know or are unsure if superannuation is taxed at a lower rate than other investments.
Almost one in two millennials do not know or are unsure of the age pension eligibility rules.
More than 50% do not know or are unsure of the minimum age for superannuation access.
Latest MySuper statistics
This week, the Australian Prudential Regulation Authority (APRA) published its latest figures on default MySuper products.
MySuper is the default option offered by most super funds. Employers pay superannuation into this type of fund for workers who do not want to choose their own super product.
APRA has just over 14.7 million MySuper accounts registered.
The most common savings balance is $1,000 to $5,999 (14.5% of accounts). The next most common is less than $1,000 (12.4% of accounts), and $100,000 — $199,999 (11.6% of accounts).
Younger generations are more likely to have MySuper products.
The most common age groups among MySuper account holders are under-25 years (17.5%), 25-29-year-olds (13.4%), and 30-34-year-olds (12.5%).
