New research shows three quarters of Australians believe super is important to their future financial wellbeing - yet public understanding of how super works to grow people’s savings remains low.
The Pyxis Polling and Insights survey finds seven in 10 Australians don’t know the Super Guarantee rate and 75 per cent could not nominate super’s low tax rate, and a third check their super balance less than once a year.
The power of compounding returns to grow savings inside super is also not widely understood.
But Australians who feel they understand super are more likely to be engaged with their savings, be happier with their financial decisions, and strongly support the super system.
The survey of 1030 people in July found:
- Australians’ satisfaction with their super fund’s performance is highest amongst those who say they understand super - with 57 per cent saying they are in a good performing fund.
- Nearly 90 per cent of Australians with a good understanding of super say it makes them feel more confident about their finances - compared to 60 per cent of those who say they have an average or below average understanding of how super works.
While 29 per cent rate their understanding of super as an 8 or more out of 10, most Australians say they have a moderate understanding - with 53 per cent giving ratings between 5 and 7.
That’s why the Super Members Council is launching a new public awareness initiative, ‘How Super Works’ to help ensure Australians understand the powerful benefits of super.
Featuring everyday Australians having conversations about super, the initiative delivers accessible messages, facts and data about super and how it works.
Super Members Council CEO Misha Schubert said the awareness initiative launched today aimed to demystify super and put more Australians in the best position to maximise their superannuation.
“Nearly three-quarters of workers today weren’t in the workforce when super was legislated 32 years ago – so it is timely to help more Australians understand how this system works for them – and why it is the envy of the world,” she said.
“The more you know about super, and the more engaged you are with your super, the better you can make super work for you.”
“Because super works automatically to help people build lifetime savings to deliver them income in retirement, it can be out of sight and out of mind for many, especially for younger people.”
“Understanding the basics of how super works strengthens people’s engagement with super and helps Australians get the most out of our country’s world-class super system.”
And while trust in super is high, there is a need to strengthen Australians’ knowledge of the system. The Pyxis Polling and Insights survey for the Super Members Council found:
- Around one in three Australians correctly nominate the current Super Guarantee rate of 11.5 per cent, with just under half (48 per cent) within 0.5 per cent of the correct answer.
- But one in four Australians say they don’t know the current super rate.
- Three quarters of Australians don't know that super contributions are taxed at just 15 per cent.
- Only four in 10 Australians know that retirement balances are usually mostly made up of compound returns from investments - and not the super contributions made into our super.
- And two in 10 Australians incorrectly believe that having any money in super at retirement makes you ineligible for the age pension.
The survey found people who knew the answers to these questions are more engaged with their super and most likely to be happy with their funds’ investment performance.
Ms Schubert said the public awareness initiative being launched today featured everyday Australians with super talking in clear and simple language about how super works.
“Australians value super. They trust it is delivering for them and know how important it will be for their retirement - for many people, it will be one of their largest assets.”
“But super can seem complex and the basics aren’t well understood by everyone. That’s why there's a need for easy-to-understand explainers about the power of compounding returns, how super is taxed lightly because it is saved for retirement (and not withdrawn early), and how super works for people.”
The ‘How Super Works’ content will be featured on social and digital media. To find out more visit www.howsuperworks.com
Key Facts:
Seven in 10 Australians do not know what the super rate is.
Three quarters of Australians don’t know that super contributions are taxed at just 15 per cent.
Only four in 10 Australians know that retirement balances are usually mostly made up of compound returns from investments - and not the super contributions made into our super.
About us:
The Super Members Council advocates for more than 11 million Australians who have over $1.5 trillion in retirement savings managed by profit-to-member superannuation funds. Our purpose is to protect and advance their interests throughout their lives, advocating on their behalf to ensure superannuation policy is stable, effective, and equitable.
Contact details:
James Dowling: 0429 437 851, jdowling@smcaustralia.com