Australia’s Retirement Funds to Become Second Largest Globally

The retirement savings of Australians is set to become the second largest globally – rising from fourth now to surpass the British and Canadian systems within the next decade, a new research from the Australia’s Super Members Council (SMC) showed.

SMC analysis projects Australian pension assets will surpass the UK in 2030 and Canada by 2031, to rise to second in the world – with the US remaining the largest. The growth of the Australian super system has helped millions of everyday Australians reach a more financially secure future.

The sector’s rising global investment capability also gives Australia stronger global clout, as a delegation of SMC leaders head to the US to search for new investment deals for members while strengthening ties.

Back home, the rising super balances of millions of Australians are reducing government spending on the Age Pension, taking pressure off all taxpayers.

SMC CEO Misha Schubert said Australia’s super system is the envy of the world as it has the fastest growing super system globally – twice the rate of international peers. Australia is the only OECD country where spending on government-funded pension payments is falling and will continue to fall, she explained.

“Super is a great Australian success story. It gives millions of everyday Australians the chance to live the life they want in retirement, while saving the Budget money over the long-term. It’s a win-win,” she and added that the system settings – automatic super payments, near universal coverage and preservation of savings have helped Australians set aside world leading retirement nest eggs.

SMC Analysis

Between 2001–2023, Australia’s cumulative contribution inflows reached 180% of GDP, the highest among OECD countries and well above the OECD average level.

Australia is the only OECD country whose spending on its Age Pension system is projected to fall, dropping from 2.5% of GDP currently to 2.0% by 2060. The average proportion of GDP spend on pensions across the OECD is 9.3%.

The proportion of Australians receiving the full age pension is projected to halve from 44% today to 21% in 2062-63.

Australia has the 55^th highest population but the fourth largest pool of pension assets – currently behind the UK, Canada and the US.

The US had an estimated $38 trillion in retirement assets as of year-end 2024, followed by Japan ($3.3 trillion), Canada ($3.27 trillion), the UK ($3.14 trillion), and Australia ($2.64 trillion) respectively.

Total funds under management in Australia are currently $4.1 trillion, exceeding any single Sovereign Wealth Fund including Norway ($2.8 trillion) and China ($2.1 trillion).

The scale of Australia’s international investment pool has also strengthened Australia’s global influence and security by deepening our economic and trade links with key global players.

Having one of the largest reliable pools of long-term stable capital creates new opportunities for investments to deliver strong returns for the retirement nest eggs of Australians.

Through super, millions of Australian workers own a profit-slice of world-leading publicly listed companies, toll roads, data centres, shopping centres, and renewable energy projects.