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Australians prioritising nest egg over property: could super surpass property as a key financial asset?

Georgia Brown avatar
Georgia Brown
- 3 min read
Australians prioritising nest egg over property: could super surpass property as a key financial asset?

A new study has revealed that more Australians (22 per cent) said growing their savings was their top financial priority, compared to those (12 per cent) who cited saving for a home as their number one financial focus.

The survey of over 2,000 Australians, which was conducted by superannuation fund Equip, also revealed that one fifth (19 per cent) of respondents were prioritising covering living costs against the backdrop of rising inflation.

Meanwhile, one in four respondents (27 per cent) said they had more disposable income than at the start of the pandemic, while a similar proportion (25 per cent) said they had less.

Scott Cameron, CEO of Equip, said: “Many Australians are emerging from COVID with more disposable income than they did at the start. Yet, our research finds that the vast majority aren’t intending to use this surplus to invest in property.

“The question becomes, what should you do with your extra income to safeguard your future if property isn’t the answer? For many Australians, investing in their super could be the best option.

“It’s not inconceivable that super will surpass property as the key financial asset for many Australians, as home ownership becomes increasingly out of reach. This will only become more likely as the Superannuation Guarantee rate increases from 10.5 per cent to 12 per cent in the coming years.”

Despite house prices falling in some of Australia’s major cities in recent months, rising interest rates continue to make it difficult for many Australians to enter the property market.

How can you use your savings to boost your super balance?

Those looking for alternative ways to set themselves up financially for the future may be considering investing more of their savings into their super. There are two main ways to do so:

  1. Make additional concessional contributions:Concessional contributions are made up of the super guarantee (the minimum percentage of your salary that your employer must pay into your superannuation fund) plus any extra contributions you choose to make into your super fund before tax. They are taxed at a rate of 15 per cent in your super fund and are capped at $27,500 per financial year.
  2. Make non-concessional contributions:Non-concessional contributions are personal contributions made from your after-tax income. They are not taxed in your super fund, as they will have already been taxed, and they are capped at $110,000 per financial year. If you are a low or middle-income earner and you make after-tax contributions to your super fund, you may be eligible for a government co-contribution up to a maximum amount of $500.

Making the most of your retirement nest egg begins with practising good financial habits, including regularly comparing your super fund’s performance against that of others, to ensure it remains competitive.

RateCity's superannuation comparison tables can help you easily compare your super fund against others to see how it stacks up.

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Product database updated 23 Jul, 2024

This article was reviewed by Personal Finance Editor Peter Terlato before it was published as part of RateCity's Fact Check process.