Australia’s 2026 Intergenerational Report, released Monday by Treasurer Jim Chalmers, maps four decades of demographic shift. For the life insurance market, the more immediate question is what it signals about clients who are already in advisers’ books.
Treasury projects life expectancy at birth to reach 89.5 years for women and 86.1 years for men by 2065-66, with more Australians than at any point in the nation’s history expected to live into their 90s.
The number of Australians over Age Pension age is projected to almost double to around nine million by 2066. The proportion of that group receiving a pension or income support payment is forecast to fall from 66% to 52% over the same period.
Age and service pension expenditure is projected to decline from 2.3% of GDP to 1.8% by 2065-66 – and by 2060, Australia is projected to have the lowest public pension spending in the OECD. The OECD average sits at 10.3%, compared to projections of close to 10% in the UK, 8% in Canada, 7% in New Zealand, and 6% in the US.
Australia’s compulsory superannuation system is containing public pension costs. The gap is at the individual level – in planning, confidence, and coverage.
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Joint research from TAL and McCrindle found that 91% of Australians recognise the importance of retirement planning. Only 62% have or are developing a plan.
TAL general manager, retirement and wealth, Shaun Bransdon (pictured) said the IGR sharpens that divide. “The latest intergenerational report highlights what longer lives will mean for Australia. New research from TAL and McCrindle shows many households are not yet prepared: while 91% of Australians recognise the importance of planning financially for retirement, only 62% have or are developing a plan,” he said.
That 29-percentage-point gap has a demographic address: Gen X.
More than one in three Gen X Australians – 37% – told TAL and McCrindle they do not feel in control of their financial future. No other generation recorded a higher proportion.
Gen X, broadly those now in their mid-40s to late 50s, is managing layered financial obligations at once: active mortgages, dependent children, and in many cases the care needs of ageing parents.
“This is particularly important for Gen X, who may be preparing for retirement while supporting both children and ageing parents,” Bransdon said.
The coverage picture reinforces the concern. The NobleOak Life Insurance Pulse Report, published in April 2025, found that 23% of Australians with life insurance believe they are underinsured – up from 18% the year prior. Among those holding cover through superannuation, that figure rises to 27%.
For Gen X, whose default superannuation cover was typically set when their financial obligations were smaller, that self-reported gap likely understates the actual shortfall. This is also, for many in this cohort, the last realistic window to obtain or increase cover before age and declining health make it more expensive or difficult.
The IGR’s projections sit alongside a structural shift in how Australians actually leave the workforce – one that directly challenges the design assumptions built into most income protection products.
TAL and McCrindle found that almost three in 10 Baby Boomers aged 62 to 80 remain in some form of paid employment. Bankwest Curtin Economics Centre data from 2026 puts a precise figure on this: labour force participation among Australians aged 65 to 69 now stands at 35.3%, up from 25.5% in 2016 and 29% in 2021. The IGR itself notes that participation rates among Australians aged 65 and over have risen by around one percentage point since the 2023 Intergenerational Report, and by 9.5 percentage points since 2002.
People are phasing out of work gradually – reducing hours, returning after a break, or combining part-time work with superannuation drawdown. Most income protection products remain structured around a fixed retirement date.
“Retirement is also becoming less of a fixed endpoint. Financial plans need to adapt as people’s income, health, and family responsibilities change,” Bransdon said.
For brokers, that creates a practical problem: a client who remains in part-time work past 65 may carry coverage needs that a standard pre-retirement review does not capture.
Of approximately 15,550 registered financial advisers in Australia, only about a third provide risk advice. Of that group, roughly 500 advisers account for half of all new life insurance business, according to Professional Planner. Annual retail life insurance volumes remain 42% below pre-Royal Commission levels, per Adviser Ratings, despite a 21% lift in new business in the second quarter of 2025.
A growing, underserved population and a contracting distribution base are pulling in opposite directions.
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From July 10, 2025, any broker providing personal advice to a retail client about life risk insurance products must obtain informed written consent before receiving a commission. Without it, the commission is deemed conflicted remuneration under the Corporations Act, per the Australian Securities and Investments Commission’s (ASIC) Information Sheet 292.
The Financial Advice Association Australia (FAAA) has said risk advisers must provide the required disclosure information and obtain compliant client consent before relevant insurance commissions are paid. The obligation is determined by the date the policy is issued or sold, rather than the date advice is provided – a distinction that can matter where application processing or underwriting delays push a policy’s issue date past July 9, 2025.
“The report looks decades ahead, but how prepared Australians are for longer and less traditional retirements – and how confident they feel – will be shaped by the decisions they make today,” Bransdon said.
