Australians are spending increasingly less of their savings in retirement, even as the amount of money salted away into superannuation is on the rise.

The latest figures from regulator APRA show that total contributions to superannuation jumped 88.1 per cent to $146.5 billion during the 2022 financial year.

But withdrawals from super fell 9.5 per cent to $85.8 billion in the same period.

Although part of that decline in withdrawals relates to the ending of pandemic fears, it also paints a picture of how Australians are busy building retirement balances that they don’t plan to spend.

Most people plan on giving some of their superannuation savings to their heirs and descendants, research from National Seniors and financial group Challenger found.

Overall, 23.3 per cent of people plan to not touch their nest eggs throughout their retirement, instead planning to spend only the interest their balances earn to sustain themselves.

A further 48.7 per cent of seniors surveyed said they plan to spend only part of their savings through retirement.

Less than 20 per cent said they thought they would spend all their super.

The overall balance between savings and spending in superannuation as pandemic fears roll away is stark.

Net contributions to superannuation jumped from $33.8 billion to $65.6 billion.

This means that as a community we are boosting retirement savings despite factors mitigating against it, like the rising cost of living.

Superannuation savings actually declined by 0.5 per cent during 2021-22, but despite that the ratio of money spent in retirement declined slightly.

In the 2020-21 financial year, superannuation withdrawals accounted for 0.28 per cent of super savings.

But in the year just gone, that amount spent fell slightly to 0.25 per cent of savings.

Retirement decisions

Obviously saving and spending decisions in retirement are not the same for everyone.

Men surveyed said they were more likely to maintain all or most of their savings through retirement than women.

That is due to having higher super savings because of the gender pay gap, as well as the increased likelihood that women will do more unpaid caring work over their lives than men.

Average male superannuation balances stand at $161,834 while the figure for women is $129,506.

Account balances affect how people plan to fund their retirements.

Of those with more than $500,000 in superannuation 28.3 per cent planned to save all or most of their capital.

Of people with less savings, only 18.3 per cent felt they were in a position to do so.

Just 12 per cent of people with more than $500,000 expected to spend all their retirement savings, while 24 per cent with lower balances felt they would spend it all.

Overall, the survey found: “Australia’s retirement income system is ranked one of the best in the world for being adequate, equitable and broadly sustainable.

‘‘As the superannuation guarantee matures, retirees are generally able to maintain a standard of living similar to their working lives with the age pension acting as a safety net for those with lower means.”

Super inequality

However, the superannuation system is spread right across the community and many people have not had the benefits of a working life with the superannuation guarantee at the 10 per cent level it now sits at, said Ian Henschke, chief advocate with National Seniors.

‘‘There are 10 per cent of people doing really poorly [in retirement], 20 per cent doing not that well and others doing OK,’’ Mr Henschke said.

‘‘There are 30 per cent of women who will retire with no superannuation and about 90 per cent of retirees who want to work more.’’

Mr Henschke said of the retirees who wanted to work more, 60 per cent said they needed more money.

Another factor making people reluctant to spend in retirement is health concerns.

‘‘A lot of people say they are worried about unexpected health costs and the costs of aged care,’’ Mr Henschke said.

The New Daily is owned by Industry Super Holdings