Despite the COVID-19 causing uncertainty around retirement plans, more Australians are now engaging with their superannuation and are positive about the super guarantee (SG) increase, according to Colonial First State (CFS).
A CFS survey undertaken in Greater Sydney with more than 2,000 currently employed Australian workers found that 54% of Australians were now regularly checking their superannuation balances (compared to 42% in 2020), and two-thirds were positive about the changes to SG and concessional contribution caps, with younger workers looking to build their funds through additional contributions.
Of those surveyed, 70% of workers were aware that the SG increased from 9.5%to 10% from 1 July. However, the survey found that more than half (55%) did not know about the increase in the annual concessional contribution caps from $25,000 to $27,500, suggesting they were unaware of the financial gains they could make ahead of retirement.
Further to that, in response to the increased contribution caps, 30% of workers said they were planning to contribute additional funds into their super, either via salary sacrifice (20%) or direct after-tax contributions (10%).
Among those looking to increase their contributions, more than half (53%) were aged between 25 to 44 years, followed by wealth accumulators (45 to 54 years) and pre-retirees (55 to 65 years) at 20% each. Over a third (37%) were looking to contribute to the maximum amount permitted ($27,500 pa).
Chief executive officer of CFS superannuation, Kelly Power, said: “More than a year on, the COVID-19 continues to cause financial uncertainty in the lives of many Australians. As a result, people are looking more closely at their finances - including their retirement savings.
“It’s encouraging to see that Australians increasingly recognise the importance of super as a savings vehicle for retirement and are showing higher levels of engagement, but there is still room for improvement.
“The repercussions of unemployment and lost savings during the pandemic have taken a toll as we can see from our research that a quarter of all Australian workers are rethinking their retirement plans and are considering working longer.”