An overwhelming majority of Australians support lifting the compulsory super guarantee (SG), believing they need to save more for retirement than they currently are. But is that actually the case?
The Association of Superannuation Funds of Australia (ASFA) has released consumer research that reveals most Australians believe they need to put more money into super and are fearful of not having enough to live well in retirement.
The research consisted of a survey on respondents’ attitudes towards superannuation in general, compulsory superannuation and increasing the SG to 12 per cent.
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The SG currently sits at 10 per cent, and is scheduled to rise in 0.5 per cent increments each financial year before reaching 12 per cent on 1 July 2025.
More than 80 per cent of respondents agreed with the statement ‘people need to save more superannuation, not less’.
Three-quarters of respondents also agreed with the statement ‘postponing the SG increases may mean that many people will have to work longer in order to retire’.
The research reflects a persistent fear that not only will respondents themselves not have enough to retire comfortably, but that others who have not saved will become a drain on the country.
Read: Advocacy group calls for cap on superannuation balances
“The views of the community were unequivocal,” says ASFA CEO Dr Martin Fahy.
“It is clear that the average Australian believes more money should be saved for retirement and not less. However, many Australians are concerned that while they personally may have saved enough to live well in retirement, others who don’t save might become a burden on taxpayers.
“In this context, there is overwhelming support for maintaining the legislated increase of the SG to 12 per cent and for the compulsory nature of the system.”
But are these fears unfounded? ASFA is a body representing super funds – which have a financial interest in getting as many contributions as they can, and the fees that come with them.
Read: Why retirement planning must be personal
For instance, you’ve probably heard that it takes $1 million to retire comfortably in Australia. This figure is higher than most people end up with in their super by age 67, which understandably leads to anxiety about the future and calls to raise the SG.
Super Consumers Australia (SCA), part of consumer organisation CHOICE, says these figures are often inflated for commercial gain and don’t represent reality.
“When we reviewed a lot of the commentary on how much you need to save for retirement, we see this figure [$1 million] coming up a lot, ” SCA director Xavier O’Halloran told the ABC.
“It’s often from groups or individuals that might have a self-interest in you having more and more savings.
“They are all, of course, clipping your ticket in fees for managing that money, so you need to be really careful about what the interests are at play when you’re getting advice that you need a million dollars to retire.”
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