Australians want the opportunity to boost their super with most believing the superannuation guarantee, currently stuck at 9.5 per cent, should be raised to 12 per cent, according to new research from the the Association of Superannuation Funds of Australia (ASFA).
The research, released by the new ASFA chief executive, Dr Martin Fahy, at its national conference on the Gold Coast, reinforces the view that the superannuation guarantee rate at 9.5 per cent will not provide enough savings to deliver Australians a comfortable retirement.
Mr Fahy told the conference the SG should be boosted to 12 per cent quickly and then to the 15 per cent originally envisaged by the architect of universal super, former Prime Minister and Treasurer, Paul Keating.
“We all know that a comfortable retirement cannot be achieved via the current paused rate,” he said. “It is not enough.”
Under the current government timetable, the SG will not get to 12 per cent until 2025. the next scheduled rise is to 10 per cent in July 2021, rising half a per centage point annually till it hits the 12 per cent level on July 1 2025.
The ASFA research found 63 per cent of respondents supported increasing the SG to 12 per cent.
Dr Fahy said the research, conducted for ASFA by Core Data and based on a survey of 1,000 Australians from a cross section of the community, showed more than half those surveyed supported super as a good way of saving for retirement.
More knowledge needed
“Australians are generally supportive of super but 50 per cent of people don’t know how much super they will need for retirement,” he said.
“Twenty-four per cent of those surveyed think superannuation is too complicated and 25 per cent want more information on super. The number of people with multiple super accounts reduced by half compared to a 2013 ASFA survey. This suggests industry campaigns to promote consolidation are working.
“For the first time we asked people about the ‘personality’ of superannuation and, pleasingly, found consumers ranked the industry as professional, secure, trustworthy and stable.
“This is a reassuring response for industry, with 65 per cent of those surveyed being happy with their fund and only five per cent seeking to change provider.
“However, we also found 70 per cent of consumers do not read product disclosure statements or are not aware of them. This means many are making product choices based on emotion or they are not making any decisions at all, relying on defaults.
Trump election to eclipse Brexit
In other news from the ASFA conference, J.P. Morgan Asset Management chief market strategist for UK and Europe Stephanie Flanders said he Trump presidency will have a bigger effect on global markets than Brexit.
Ms Flanders said forecasts suggest that US inflation will rise to 2 per cent. While the conversation is mostly about the dangers of deflation, “that will change sooner than you might think. We’re already getting off the bottom in terms of inflation.”
Ms Flanders told the conference that despite Britain voting to leave the European Union, the markets had shrugged off concerns. “Equity markets remain higher than at the start of 2016; the markets essentially said that Brexit is a local problem,” she said.