For an individual getting on in years, retirement and whether they have enough in their super and savings account tends to occupy a significant amount of their daily thoughts. Perhaps unsurprisingly, this is far from the case when it comes to Australia’s youth.
In 2014, the Centre for International Finance and Regulation (CIFR) carried out a survey about attitudes to and familiarity with the Australian superannuation system. Questioning a sample of 994 superannuation fund holders aged 25-34, it found a startling lack of knowledge of basic facts about superannuation, particularly in relation to age of access and the definition of investment options — despite its vital importance to their futures.
Superannuation out of sight, out of mind for young Aussies
The survey’s respondents completed a 75-question online survey which asked them everything from basic demographic information, to their knowledge and attitude toward the superannuation system and even their basic financial literacy. The results may well shock those who are more proactive about their finances.
“Young adults are unengaged by and uninterested in superannuation or retirement planning,” the CIFR’s Superannuation Knowledge, Behaviour and Attitudes in Young Adults in Australia report flatly states.
Among the figures gathered by the survey are that:
- nearly two-thirds of young Australians can’t name the age at which they can start accessing their superannuation funds
- four-fifths rarely or never think about making changes to their investment options
- less than one-third read their annual superannuation statements
- overall, only 35 percent thought of themselves as well-informed on matters regarding superannuation
Perhaps most disquieting of all is the fact that a mere 6.5 percent had made a plan for retirement. It seems a large portion of young Australians are not even thinking about how they will finance their golden years.
Superannuation industry must reach out, says professor
Professor Ian Ramsey from the University of Melbourne, who led the study, acknowledged these worrying statistics. However, he also laid the blame partly at the superannuation industry itself. Referring to the fact that most of those surveyed overestimated their knowledge and only one-fifth expressed any trust in the industry, he told the The Age:
“This last finding tells us that the industry itself needs to work harder with this demographic to show how it adds value and to build trust.”
Doing so will be a crucial part of building a solid base for Australia’s fiscal future.
This is on top of the fact that, with Australia’s ageing population, younger generations will have even greater financial pressure in the future as they attempt to support their elders. Familiarising themselves with superannuation now, and creating a plan, could help to offset this issue.
Advice contained in this article is general in nature and not specific to your particular circumstances. Before making an investment decision you should consider your own financial situation and the relevant Product Disclosure Statement/s. We also recommend you seek advice about your own particular circumstances from a licensed financial adviser.
Discussing CPI and wages growth here seems very much out of context? It just seems like a random fact which doesn’t link to the article. If you think it needs a hard hitting fact, perhaps information on how big the superannuation pool is in the context of national savings or GDP may be more relevant.