Likely changes to superannuation could strip tens of billions of dollars from the retirement savings of Australians over the next decade and prompted a warning that future planned rises could be in peril

Australia's $1.85 trillion superannuation industry decried the government's surprise decision on Tuesday to again delay an increase in the super guarantee as part of a deal to guarantee the repeal of the mining tax. The move is a blow to the superannuation industry which would have reaped fees from increased savings flows.

One industry body estimated the agreement to put off until 2025 a rise in the super guarantee to 12 per cent of employees' pay would lead to Australians having $128 billion less in super savings in that time.

Former ACTU secretary Bill Kelty, who helped build the super system with then prime minister Paul Keating, said the deferral was "short-sighted, retrograde and sad".

"For a nation that's going to live longer, it's a very bad generational decision," he told Fairfax Media. Australia would "have to" get to 12 per cent of pay eventually to ensure people's retirements were properly funded, he said. Mr Keating in the 1995 budget said the scheme would rise to 15 per cent.

David Atkin, chief executive of the $27 billion not-for-profit fund Cbus, said the "goalposts keep changing" on super and the "future of increases to super remain uncertain".

"That's a whole cohort of workers who are going to miss out on time to save for retirement," he said. "There was no debate, it was not aired as a possibility."

The delay comes amid criticism that super funds charge too much for a compulsory scheme, and will help the budget because super is taxed at a lower rate than income tax. The deal that passed the Senate on Tuesday, with the help of the Palmer United Party, delays the rise in the super guarantee to 2025, from initial plans of 2019.

The Financial Services Council, which represents fund managers and for-profit super funds, said it had calculated the delay would mean Australians would have $128 billion less in their super savings by 2025 and would exacerbate the nation's low savings rate. The council had previously warned of a mining tax-style industry campaign against the former Labor government if it hurt the super industry.

Industry Super Australia, which represents not-for-profit funds, described the decision as a "short-term budget fix that will have long-term budget impacts on age pension outlays". It said the decision would in part "bewilder" fund members and "can only reduce confidence" in the system.

Business body Ai Group welcomed the news but the Business Council of Australia declined to comment. Some businesses have complained that they, rather than employees, pay for increases in the super guarantee.

Alex Dunnin, of super research firm Rainmaker, said the delay was "smart politics" due to the reservations of business groups.

"Funds would of course like the super guarantee to be as high as possible because the higher the contributions, the higher the money they end up managing and the higher the fees they get to manage it all," he said.

"Having said this, the superannuation industry won't suffer if the super guarantee increase is delayed because super contributions are already at record levels of $140 billion a year, and the super guarantee really only applies to low-income people."

"The problem is instead for the transitional generation of people who haven't been in super all that long ... Moreover if the pension eligibility age lifts to 70 we'll all be in super a few more years anyway."