Superannuation assets have shown signs of growth despite the impacts of COVID-19 on the Australian economy over the last 12 months, according to the latest Quarterly Superannuation Performance publication.
According to the publication by the Australian Prudential Regulation Authority (APRA), by the end of the March 2021 quarter superannuation assets totalled over $3.1 trillion. This is an increase of 13.9 per cent from $2.744.9 billion in the March 2020 quarter.
The value of total self-managed super fund assets also increased by 13.4 per cent to $787.1 billion in this same time frame.
|March 2020||March 2021||Change|
|Total superannuation assets||$2,744.9 billion||$3,126.9 billion||+13.9%|
|Total APRA-regulated assets||$1,852.2 billion||$2,131.6 billion||+15.1%|
|Of which: total assets in MySuper products||$712.5 billion||$850.0 billion||+19.3%|
|Total self-managed super fund assets||$694.3 billion||$787.1 billion||+13.4%|
|Exempt public sector superannuation schemes assets||$142.5 billion||$157.6 billion||+10.6%|
|Balance of life office statutory fund assets||$56.0 billion||$50.5 billion||-9.8%|
In the 12 months leading to 31 March 2021, employer contributions also rose by 3 per cent to $9.78 billion. Super guarantee contributions also increased by 5.4 per cent to $73.2 billion, however member contributions fell by 7.3 per cent to $23.4 billion.
As the country faced the uncertainties of COVID-19, everyday Aussies responded by squirrelling away an extra $124 billion into their bank accounts. It’s unsurprising that in the same time that Aussies prioritised growing their rainy-day funds, many increased the percentage of which they contributed to their super.
Is now the time to make super contributions?
In Australia, the current rate of this contribution – also known as the Superannuation Guarantee - is 9.5 per cent of ordinary time earnings.
The Super Guarantee is tipped to increase to 12 per cent in 2025. While this notion has become a point of political debate as of late, the 2021-2022 Federal Budget noted that this would indeed go forward.
It’s worth keeping in mind the financial impacts of increasing the compulsory or voluntary superannuation taken from your pre- or post-tax earnings. Put simply, the more money you’re adding to your super, whether via an increased rate of guarantee or from salary sacrificing, the greater your nest egg will be at retirement.
Assuming your budget allows for it, here are three ways you may be able to increase your superannuation before retirement:
- Concessional contributions – Also known as salary sacrificing, you arrange with your employer that they direct a nominated amount or percentage of your pre-tax income to go into your fund on top of the Super Guarantee.
- Non-concessional contributions – You are also able to make after-tax contributions into your super fund. There is a contribution cap, but it is significantly higher than the concessional contribution cap so you’re able to boost your retirement savings further.
- Spousal contributions – A spouse or de facto partner may also be able to boost your super fund by making contributions into it for you. This is often recommended to those who have taken time out of the workforce, especially for maternity leave or caretaker work, as it may help to reduce the gender super gap.
If you’re unsure whether to consider making super contributions, ASIC’s calculator estimates what type of contribution may provide the biggest boost towards your retirement.