The real reason why delegations from UK commercial pension scheme set off to Australia so frequently is they’re looking for reasons why the UK Government should adopt the means tested “age pension”.

The answer is simple and good reading if you run a workplace savings plan – like master trust or group personal pension

Yes, rather than lean on the Australian taxation system, Super, which needs no incentivisation (it is compulsory) is relieving the Australian tax-payer of State Pension liabilities. Here it is spelt out by Penny Pryce.

Australians are relying less on the age pension to fund their retirement as their super balances grow, according to Association of Superannuation Funds of Australia (ASFA) research.

The study revealed about 56 per cent of people aged 65 or over now receive a full or part age pension compared to 70 per cent in 2012.

Average superannuation balances for people aged over 15 were $202,644 for men and $164,206 for women in 2023/24, up from $192,119 and $154,641 in the previous financial year.

Super has three things going for it if you want it in the UK

1. It is compulsory with a contribution rate at the 12% the Pension UK want for UK savers
2. It is an easy sell to a welfare cutting government as justification for cutting state pension and eventually means testing it
3. It offers “balances” which like our “pots” offers wealth management opportunities (not yet pensions)

Australians are very proud of themselves for having de-risked the state of a DB pension through a well funded DC pension system, above expected returns on Super investments and agreement from all parties (employers, unions and Government) that this is good news for Australia. Here is Penny’s verdict.

As more people reach retirement having had the benefit of double-digit compulsory super for most of their lives, we’ll see the system come to full maturity, with most retirees living on an income well above what Centrelink can sustainably provide as our population ages.”

Treasury’s “Retirement Income Review Final Report” predicts the proportion of people over 67 receiving either a full or part age pension will drop to 50 per cent by 2059.

At 2.3 per cent of gross domestic product (GDP), Australia has one of the lowest public pension expenditures among Organisation for Economic Co-operation and Development countries, where the average is around 9 per cent. Expenditure in Australia is also expected to experience a 2 per cent GDP drop over the next 40 years as superannuation balances grow.

“The system maturing means that we are constantly seeing Australians taking a step up, either from the full pension to a part pension, or from a part pension to being able to fully fund their own retirement through their savings,” a spokesman said.

The idea of needing a state pension as a kind of financial weakness is implied here.  The prospect of getting no payment from the state being seen as an achievement.

Over a decade ago, our Government Actuary suggested that we might be able to dispense with our triple lock if auto-enrolment was a success. There was an expectation not that we’d do away with the need for state pension but that we could reduce pension increases.

I can understand how our private sector pension policy people would like to get aspects of the Australian Super system into the UK but I don’t think that we have a view of the state pension or of compulsory DC savings contributions that are popular in Australia.

I don’t expect to see a Labour Government and our unions having the same attitude to either DC saving or to means testing of our state pension.