High fees eroding Australian super

Research by ING DIRECT confirms there is wide variation in super fees being paid by the average Australian worker, which can lead to an erosion of up to $192,000 off superannuation savings for retirement.

According to ING DIRECT super fees ranged from 0% to around 2.33%. The average fee is 1.15%.

In dollar terms, the difference between the top-fee paying Australians and the low-fee paying Australians was $1,165 annually on a super balance of $50,000.

“Fees can have a significant impact on superannuation savings over the course of a working life, and fees are important aspects that we can all control,” said Lisa Claes, Executive Director of Customer Delivery for ING DIRECT.

“It is important for all Australians to take a moment to check the super fees they are paying. Many people have more than one fund, which means doubling up on fees and adding to the fee impost, so it is a good idea to check if you have any lost or forgotten super accounts and think about consolidating multiple funds into a single low fee account.”

Other research findings by ING DIRECT confirmed that actively managed super funds charging higher fees did not significantly outperform low-fee passively managed super funds.

The ING DIRECT figures come as Industry Super Australia has called on the government to rule out proposals to weaken Australia’s compulsory superannuation system by allowing early access to buy homes or for re-training.

“Such proposals (allowing early access) are completely at odds with the objective of encouraging Australians to build private savings to take pressure off the aged pension,” said David Whiteley, Chief Executive of Industry Super Australia.

“For many Australians, particularly women, the existing superannuation policy settings won’t be able to deliver them a comfortable retirement. Any contemplation of allowing early access to super for other purposes will severely hamper the capacity of the super system to deliver adequate levels of retirement savings.”

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