New global research reveals that Australia’s housing affordability crisis is bleeding into confidence about retirement, with Australiansmore stressed about housing affordability and more pessimistic about retirement than their global peers.

The 2025 Global Retirement Savers Study released this week by T. Rowe Price draws on responses from more than 7000 individuals in Australia, Canada, Japan and the UK.

Michael Davis, T. Rowe Price global head of retirement strategy, says it reveals unexpectedly low retirement confidence in Australia, and housing explains much of that result.

“Australians were more pessimistic than I would have expected about their retirement readiness relative to other countries,” Davis tells Retirement Magazine.

“If you looked at all the different areas of stress – because we did probe areas of stress – where Australia ranked higher than the global average was concern around housing.

“They were at averages with respect to most of the other categories, but housing was the one that came through fairly significantly for them, relative to other countries. Other countries had other concerns that they expressed, but Australia was pretty uniform in expressing a concern around preparedness for housing expenses.”

Housing stress is not an issue directly related to – and therefore not remediable by – super funds themselves, Davis said.

“I look at that and say that perhaps the issue is not primarily about the supers, and primarily about [members’] access to advice and these kinds of things. It might be just this high level of anxiety and stress around housing costs, and that’s bleeding into everything else.

“A lot of people would say, just given the strength of that system, you would expect a higher level of optimism. But I’m thinking that because housing is the only characteristic that came through like this, it must be fairly intense.”

Davis said future iterations of the research may seek to tease out differences between individuals who own their home versus those who rent.

“Just given the strength of this housing component in Australia, I [might] probe that more. I want to be able to identify those in the survey pool that own versus rent, to your point, and ask them different questions, just to see if that’s real. And then the question becomes, what role should the retirement plan play in supporting that issue?”

Davis says he was also struck by Australia’s above-average reliance on government websites.

“It’s an outlier relative to most of the other countries; I wondered if people were conflating that with the superannuation providers,” he says.

“People in Australia get a lot of their information through the supers’ sites. So that was interesting to me.”

Davis says it’s striking in a global context how barriers between super funds and financial advisers are falling.

“In Australia the numbers of people who would benefit from it, relative to the amount of advisers who were available, was quite disproportionate. We found that there were some supers that were being pretty creative and trying to partner with some of the advisers to deliver advice through the platform. Others were trying to think about technology-enabled ways to create advice at scale.”

Common issues, key differences

The global research was commissioned to identify common issues and key differences between markets and to build a longitudinal, comparative data set that will help regulators, funds and service providers refine retirement income strategies.

Davis says data is most interesting when it’s comparative or longitudinal, and the firm’s plan is to repeat this survey, so the dataset becomes both. The research took place in July this year and included 1000 responses from Australia and was approached with no preconceived ideas about how individuals’ concerns might vary country by country.

When individuals were asked about their goals for retirement, the top three in all four countries are “remarkably” consistent.

“This objective of having overall financial peace of mind is a goal for just about every retirement saver,” Davis says.

“Maintaining an acceptable quality of life, managing and budgeting for day-to-day expenses – those things seem to be very, very similar.”

Davis says there were different levels of retirement optimism recorded in different countries, but in no country was there a majority who said they were very optimistic about their prospects for retirement.  At a global level uncertainty about lifespan plays a major role.

“People don’t know how long they’re going to live. In general that just creates stress, and I think that’s a fairly universal experience,” he says.

The research reveals anxieties about both retirement and broader economic conditions, across all countries.

Economic and political differences between countries inevitably means there will be “idiosyncratic cultural approaches that different countries will have to take” to address their respective retirement confidence levels.

Davis says the UK is moving on several fronts, including automatic enrolment, increasing contribution rates and providing greater flexibility at retirement.

“They are expressing more latitude and optionality with respect to retirement income, which I think is very positive,” he says. “Not everybody should be in an annuity.”

The UK is also examining emergency savings models and pioneering collective defined contribution (CDC) schemes.

“They basically collectivise the assets… in a risk-pooling way that allows them to run the assets, they would say, a lot more effectively.”

All countries face demographic issues as their populations age, but it’s most severe in Japan.

“They have some of the highest longevity rates in the world [and] one of the lowest fertility rates in the world,” Davis says. The country is currently experiencing its lowest birth rate in 75 years.

“They are disproportionately invested in cash… and inflation is starting to become a problem.”

Davis says the country’s preference for do-it-yourself decision-making complicates efforts to shift individuals into more appropriate defaults.

“Given the severity of the challenge in Japan, the tilt, in our opinion, should be a little bit more on the default side than just educational.”

Canada shares many similarities with Australia but faces structural limits due to provincial fragmentation.

“If you’re a company that’s got employees arrayed in different provinces, it can be very complicated,” Davis says

“One of the biggest challenges [is] to get something that is more national in scope.”