The 2026 Intergenerational Report projects that growing super balances will shrink the age pension’s share of the economy over the next 40 years, even as the number of Australians over pension age almost doubles. It also confirms what many younger Australians already feel: building wealth and buying a home is harder for them than it was for their parents.
Treasurer Jim Chalmers released the report on 21 September 2026. It is the seventh such report since 2002 and looks out to 2065 to 2066.
The big picture: larger, older, slower growing
The report expects Australia to be larger and older in 40 years. ABC reporting on the release put the projected population at around 40 million, with falling fertility meaning more Australians are projected to die than be born by 2066.
On Treasury’s projections, the economy will be more than twice its current size by 2065 to 2066, and income per person around 55 per cent higher.
The budget outlook has improved compared with the 2023 report, but a structural deficit remains. The underlying cash deficit is projected at 0.3 per cent of GDP in 2036 to 2037, widening to 1.8 per cent of GDP by 2065 to 2066.
What it says about the age pension
Spending on age and service pensions is projected to fall from 2.3 per cent of GDP last year to 1.8 per cent in 2066.
That is despite the number of Australians over pension age almost doubling to around nine million by 2066. The reason is super. As more people retire with larger balances, the share of that age group receiving a pension or income support payment is projected to fall from 66 per cent to 52 per cent.
Treasurer Chalmers previewed these figures in a speech to the Super Members Council on 9 September 2026. He said that if pension spending stayed at today’s share of the economy, the annual bill by 2066 would be about $31 billion higher, and argued Australia would spend less on pensions than comparable OECD economies by the 2060s.
To be clear, the pension is not being cut in these projections. More people are simply expected to have enough super to reduce or remove their need for it.
What it says about super balances
The Treasurer also pointed to projected growth in the balances people hold as they reach retirement age. According to figures in that speech, the median super balance at retirement age is projected to approach $450,000 over the next decade, up from a bit over $200,000 in the latest data and about $115,000 a decade before that.
These are medians, so your own balance could be well above or below them, and career breaks and part time work tend to leave people with less. Our guide to how much super you should have at your age sets out typical balances and the main levers you can pull.
The early access fight
The report lands in the middle of a live political argument about super. One Nation has proposed letting home buyers and renters access some of their super early, and the Coalition has made supportive comments. Separately, as we covered in August, the Coalition has said the 12 per cent super guarantee is under review, which you can read about in our explainer on the compulsory super debate.
The Super Members Council, whose members are profit-to-member funds, has modelled the early access idea. It said a median full-time worker who withdrew 3 per cent of their super for three years would be about $25,000 worse off at retirement, and a couple more than $50,000 worse off. Chalmers said every dollar a 25-year-old withdraws now would cost them around $3 by the time they retire. Supporters of early access argue that home ownership itself is a major support in retirement.
A dollar left in super at 25 has 40 years to compound. Any plan to spend it early should be weighed against what it would have grown into.
The generational squeeze on housing
The report’s findings on wealth are sobering for younger Australians. ABC reporting on the release said average real net household wealth rose from about $500,000 in 1993 to $1.3 million in 2019 to 2020. Gross housing wealth almost tripled in real terms between 1994 and 2020, while super wealth grew five-fold.
Much of that growth went to people who already owned property. Home prices have grown roughly twice as fast as earnings since 2000, according to the report as reported by the ABC, and younger generations have seen much smaller wealth gains than those born in the 1950s and 1960s. The report describes younger Australians working longer and finding it harder to buy a home, without the early boost to income and wealth earlier generations enjoyed.
What it means for your money
This is general information only, not personal financial, tax or legal advice. The Intergenerational Report is a set of long-range projections based on current policy settings, and those settings can and do change. A few practical takeaways stand out:
- Super is doing more of the heavy lifting. Treasury’s projections assume the super system keeps maturing. Fees and investment choices compound over decades.
- The pension remains a safety net. More than half of people over pension age are still projected to receive some payment in 2066, so it will remain part of many retirement plans.
- Housing and super are linked. Using super for housing is a trade-off between buying sooner and retiring with less.
If you are working through budgeting, saving and long-term planning, you can find practical guides to saving and managing your money that go beyond super.
The bottom line
The 2026 Intergenerational Report, released on 21 September 2026, projects that a maturing super system will hold down pension costs even as Australia ages, with pension spending falling to 1.8 per cent of GDP by 2066. The flip side is a clear warning that younger Australians face slower wealth gains and a harder road into home ownership. All figures here are Treasury projections or ministerial statements as reported between 9 and 22 September 2026, and they will change as policy and the economy do. For the full report and its assumptions, go to Treasury’s Intergenerational Report page, and check your own super details with your fund or the ATO.