Young Aussies aren’t worried about super

While many aren’t motivated or simply don’t know why they should engage with super, the long-term benefits far outweigh the effort.

New findings from research house Ideally revealed that more than a third of young Australians check their superannuation balance rarely, some only once a year.

More than one in four can’t name their fund.

The survey, conducted by the Super Members Council (SMC) and including more than 1,300 Australians, found that a lack of knowledge and the length of time until retirement are among the reasons.

However, the reasons for checking super are compelling.

Managing excessive super fees alone can make a significant difference, with an SMC model showing that simply paying 0.1 per cent more in fees can reduce super savings by $14,000, and paying 1 per cent more could make someone $128,000 worse off by retirement.

Some young Australians are disengaged from their super because retirement feels far away, with 33 per cent saying super doesn’t yet feel like their money. In a recent episode of The Lawyers Weekly Show, Veronica Barbetta of UniSuper noted that younger professionals aren’t concerned with or managing their super to its full potential.

She said: “The earlier you engage with and think about your superannuation and make active choices, the better your outcome in retirement will be.”

Past research by SMC revealed that those with better super comprehension are six times more likely to take action to improve retirement savings. Currently, 46 per cent of young Australians are interested in being properly educated in super by their fund, according to the latest survey.

Also promising is the Super Guarantee rising to 12 per cent, which means super is growing and Australians are set to retire with more savings.

However, super literacy is not where it needs to be. SMC CEO Misha Schubert noted that more needs to be done to communicate how to make the most of super.

“Too many Australians risk sleepwalking into retirement with less money than they should have because they haven’t felt confident to engage with their super,” she said.

According to the SMC, one in four workers is not being paid all their super, costing 3.3 million Australians almost $6 billion a year. Checking with a super fund or an employer is the easiest way to remedy this.

Other advice from the survey included consolidating super into one account, thereby avoiding multiple fees, as well as selecting a top-performing super fund and, if possible, making extra contributions. The SMC model showed that an average 30-year-old could have $67,000 more at retirement by sacrificing $20 a week.

Schubert said: “Small differences in super can add up to life-changing sums over time. That’s why staying engaged with your super from when you start working until you retire is so important.”