FSC-ING DIRECT Report: Superannuation − Australia’s View
Australians overwhelmingly support superannuation with a clear majority backing a rise in compulsory contributions to 12 per cent according to a report, Superannuation – Australia’s view, released today by the Financial Services Council and ING DIRECT.
The FSC-ING DIRECT report has found that 89% of respondents in a survey of 1,000 working Australians strongly support superannuation. Eighty-four per cent also strongly favour an increase in compulsory superannuation savings to 12 per cent.
John Brogden, CEO of the Financial Services Council said: “This is sound evidence that our superannuation system is working well and is on track to achieve its goals.”
While support for super is strong two thirds of Australians believe their super funds are not transparent enough when it comes to fees and charges.
Vaughn Richtor, CEO of ING DIRECT said “We would encourage people to learn more about their superfund, its performance and fee structure to ensure it is the best fund for their own circumstances.”
- Confidence and engagement in super has improved in the past 12 months due to strong performance
- 89% support superannuation as a good way of saving for retirement
- 83% support increasing contributions to 12%
- 62% believe they will not have enough to fund a comfortable retirement
- 48% don’t know the fees they pay on super
- Of the 52% who do know their fees the majority (37%) believe they are paying too much
- 74% had their super fund chosen by their employer
The report also found consumer perceptions of the amount required for an adequate retirement varied widely – 46% believe $500,000 or less will be enough while 38% say $1 million or more is the right amount.
While most people are able to recall their current superannuation balance most (62%) also believe they will not have enough to fund a comfortable retirement.
Superannuation balances for the average male are currently $198,000 while the average female has $112,000.
“It is clear that consumers want stability in the superannuation system and for compulsory superannuation savings to continue to increase to 12 per cent,” Mr Brogden said.
Despite some misgivings about the ability of their superannuation fund to provide a comfortable retirement, Australians see superannuation as a worthwhile system that is essential in providing, or at least contributing, to this goal.
“The industry has a role to play in ensuring people understand how their super fund operates and what retirement nest egg they can expect with the right level of risk,” Mr Richtor said.
Mr Brogden added: “Governments can greatly assist by continuing to invest in financial literacy for consumers.”
“Superannuation will be the biggest investment many Australians will make during their lifetime.
With many consumers in default funds, it is critical that MySuper does not create a set and forget mentality. Financial advice along the way can significantly help consumers achieve their retirement goals,” Mr Brogden said.
“As a compulsory system it is critical that superannuation maintains strong support to ensure superannuation achieves its full potential and that Australians have adequate savings in retirement,” Mr Brogden said.
Director of Communication
Financial Services Council
Ph: 0411 177 773
Head of Corporate Affairs
Ph: 0412 933 060
The FSC-ING DIRECT Report: Superannuation − Australia’s View was conducted through a national survey of 1,000 working Australians with superannuation (between 12 – 18 June 2013) and two focus groups held in Sydney on 25 June 2013, comprising 8-10 working people with superannuation.
About the Financial Services Council
The Financial Services Council represents Australia’s retail and wholesale funds management businesses, superannuation funds, life insurers, financial advisory networks, trustee companies and Public Trustees. The Council has over 130 members who are responsible for investing more than $2 trillion on behalf of 11 million Australians. The pool of funds under management is larger than Australia’s GDP and the capitalisation of the Australian Securities Exchange and is the fourth largest pool of managed funds in the world. The Financial Services Council promotes best practice for the financial services industry by setting mandatory Standards for its members and providing Guidance Notes to assist in operational efficiency.
About ING DIRECT
ING DIRECT pioneered branchless banking in Australia by offering the first online, high interest, fee free savings account. Our low cost operating model allows us to pass these savings on to the customer in the form of great value products and services. Today, ING DIRECT has more than 1.4 million customers with $30 billion in deposits and $38 billion in mortgages and a range of products including transaction accounts and superannuation. Please note ING DIRECT is never abbreviated to ING.ING DIRECT is a division of ING Bank (Australia) Limited | ABN 24 000 893 292 | AFSL and Australian Credit Licence 229823