More satisfied with super if it’s understood: Super Members Council

Yasmine Raso

Senior Journalist

6 August 2024

The results of a survey commissioned by the Super Members Council (SMC) has found a higher level of confidence, satisfaction and engagement with superannuation in Australians that reported a better understanding of it.

Of the 1,030 Australian adults polled by Pyxis Polling and Insights, only 29 per cent rated their understanding of superannuation out of 10 as eight or higher; 53 per cent rated their understanding between five and seven out of 10.

Of the respondents who felt they understood superannuation, 57 per cent said their fund was performing well, while 88 per cent said their super makes them feel more confident in their financial wellbeing. Only 59 per cent of respondents who had an average or below average understanding of super said the same.

The poll also found that knowledge of superannuation was lacking in some areas and contributed to the low levels of understanding, satisfaction, engagement and financial confidence shown in the results:

• Only 30 per cent of respondents knew the current Super Guarantee (SG) rate was 11.5 per cent, while 58 per cent suggested an incorrect rate or were unsure;
• One quarter of those polled knew the tax rate most Australians paid on their super was 15 per cent, but 40 per cent were unsure;
• Of those who said they understood super, only 42 per cent knew the correct (SG) rate and 38 per cent knew the correct tax rate.

Off the back of the poll, SMC chief executive, Misha Schubert, has announced the launch of a new campaign, How Super Works, to increase the awareness, understanding and financial literacy of the Australian public on how to best leverage and maximise their superannuation.

“Nearly three-quarters of workers today weren’t in the workforce when super was legislated 32 years ago – so it is timely to help more Australians understand how this system works for them – and why it is the envy of the world,” she said.

“The more you know about super, and the more engaged you are with your super, the better you can make super work for you.

“Because super works automatically to help people build lifetime savings to deliver them income in retirement, it can be out of sight and out of mind for many, especially for younger people.

“Understanding the basics of how super works strengthens people’s engagement with super and helps Australians get the most out of our country’s world-class super system.”

The survey also found only 40 per cent of respondents knew retirement balances consist mostly of compound returns from investments not super contributions and 20 per cent believed having money in super at retirement meant you were ineligible for the age pension.

“Australians value super. They trust it is delivering for them and know how important it will be for their retirement – for many people, it will be one of their largest assets,” Schubert said.

“But super can seem complex and the basics aren’t well understood by everyone. That’s why there’s a need for easy-to-understand explainers about the power of compounding returns, how super is taxed lightly because it is saved for retirement (and not withdrawn early), and how super works for people.”

The online campaign seeks to provide accessible and digestible messages, facts and data about super from everyday Australians.