Australians are not feeling optimistic about their retirement savings, and super savers of all ages are nervous about the unknowns surrounding the federal government’s policy.
The MLC “Australia today” report highlights that two in three Australians feel “slightly or not at all prepared” for retirement, with nearly 80% of young Australians aged 25-29 concerned about their decades-away retirements. Seventy-four percent of women feel unprepared for finishing work, compared with 54% of Australian men, according to the report.
“Very concerning is the fact that young people feel unprepared, especially if some of these were young women, as these women have time on their side,” says Women in Super executive officer Sandra Buckley.
“Savings made now into their superannuation accounts are extremely important to take advantage of the compounding effect, long-term nature of investment outcomes.”
The MLC report highlights that those using financial planners and advisors are more confident that they will not have to rely on the pension in their retirement, but more than half those surveyed still doubt that their super will see them through to the end of their lives.
“Access to financial planning services in Australia is indeed low,” says Buckley.
“While 70% of Australians use tax agents annually, only 25% of Australians are likely to seek advice from a financial planner at some point in their lives.”
The anxieties are prompting people to get a jump on their super balances, with MLC finding 29% of people made extra contributions to their accounts in the preceding 12 months.
Many Australians also felt stressed about balancing super contributions with other financial responsibilities.
“It’s an ongoing battle of balance between preparing for my own retirement and helping the kids. I don’t have the answers to these things,” said one survey respondent.
The report comes as a number of questions remain on the future of the Coalition’s super changes, which would put a $500,000 cap on non-concessional contributions to super over a person’s lifetime.
The party room is now fighting it out over potential changes to the policy suite that the Coalition took to the 2016 election. This morning Queensland MP George Christensen told The Australian that raising the non-concessional cap from $500,000 to $1 million would be the minimum needed to stop him crossing the floor to vote against the legislation.
Other potential compromises that have been discussed since the election include making exceptions for large balances from “lifetime events” like inheritances that might exceed the cap, and putting a future date on the limit instead of back-dating it to budget night.
The Australian super debate has seen many calls for stability over the past 12 months as self-managed super fund holders in particular feel the sting of unanswered questions.
The group Save Our Super has been fighting what it sees as a “breach of trust” by the government given the policy super suite, released in May, looks to legislate caps on contributions from May 2016.
But Council of Small Business Australia chief executive Peter Strong notes that for the small business community there are other questions on super that need answering.
“For instance, think of the lost super in Australia,” Strong told SmartCompany.
“Why are people not looking for that and where is it sitting?”
Recent figures from the Australian Tax Office show there was over $11 billion in lost or inactive super accounts during the 2015-16 financial year.