A majority of Australians are regularly checking their super, are you?

woman-checking-superannuation-balance-on-phone

Hands up if you haven’t shown your superannuation enough love? In the past you probably wouldn’t have been alone, but new research has revealed that a majority of Australians are now actively engaging with their super. 

A study of 2,000 Australian released yesterday by Colonial First State (CFS) found that 54% of workers have been regularly checking their superannuation balances this year, compared to 42% in 2020. 

According to chief executive of CFS Superannuation, Kelly Power, one of the factors driving people to check in with their super more often has been the pandemic. 

“More than a year on, the COVID-19 continues to cause financial uncertainty in the lives of many Australians. As a result, people are looking more closely at their finances - including their retirement savings,” she said.

“It’s encouraging to see that Australians increasingly recognise the importance of super as a savings vehicle for retirement and are showing higher levels of engagement, but there is still room for improvement.”

While a higher level of engagement is no doubt a positive, the study also revealed the ongoing impact the pandemic is having on the retirement outlooks of many workers. 

Colonial First State found that one in four people are considering pushing their retirement back and working longer, with that figure rising to nearly one in three among ‘pre-retirees’.

“The repercussions of unemployment and lost savings during the pandemic have taken a toll as we can see from our research that a quarter of all Australian workers are rethinking their retirement plans and are considering working longer,” said Power.

Super changes met with positivity

As part of its study, Colonial First State also gauged workers’ thoughts on the suite of recently introduced superannuation changes. The changes, which came into effect on July 1, include: 

  • An increase in the superannuation guarantee from 9.5% to 10% (rising to 12% in 2025)
  • An increase in the annual concessional contribution cap from $25,000 to $27,500

CFS found that roughly two in three workers (66%) felt positive about the increase in the superannuation guarantee and the higher voluntary contributions cap, with 27% of respondents agreeing that the financial benefit of these changes would be ‘significant’.

 

And it appears a fair chunk of workers are looking to top up their superannuation even further, with 30% reporting that they plan on making extra contributions via salary sacrificing or after-tax contributions. 

Interestingly, younger Australians were found to be the group most likely to contribute extra. 53% of those aiming to make voluntary contributions were in the 25-44 age bracket, compared to 20% of 45-54 year olds and 20% of 55-65 year olds. 

“It’s encouraging to see younger Australians are looking to make the most of these super changes including those looking to rebuild their retirement savings after withdrawing some funds early during the pandemic last year,” said Power.  

“Starting to take action early not only offers them the greatest claw back opportunity to cover the lost ground from last year but also allows them to benefit from the power of compounded returns, while saving some tax dollars at the same time. Overall, it’s a win-win.” 

RELATED: Budget 2021: Buying a home with super gets a boost but at what cost?

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