Skip to main content

One million Australians cleaned out their super accounts

Mike Taylor12 August 2022
Empty wallet

Nearly one million Australians closed or largely cleaned out their superannuation account as a result of the former Government’s COVID-19 hardship superannuation early release scheme, according to the Association of Superannuation Funds of Australia (ASFA).

In an analysis of the of the impacts of the 2020 scheme, ASFA has concluded that young people, women, single parents and the unemployed paid a high price in terms of the cost to their retirement savings.

ASFA’s key findings are that:

  • around 3 million Australians applied for early release, many of them making two applications;
  • nearly 1 million Australians closed or largely cleaned out their superannuation account as a result of early release payments;
  • the cleaning out of accounts was more prevalent for women, single parents and the unemployed;
  • for a 30 year old, taking out $20,000 in 2020 results in $43,000 less in retirement savings at age 67 (measured in today’s dollars and assuming no catchup contributions are made).

Commenting on his organisation’s findings, ASFA deputy chief executive, Glen McCrea said that while superannuation was able to do much of the heavy lifting by distributing payments to people quickly in the early days of the pandemic, it was important to recognise the detrimental impact this had on the retirement savings of millions of Australians.

He said it was more important than ever that the Government legislated the objective of superannuation to ensure that Australians’ savings are preserved to support a dignified lifestyle in retirement.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

Subscribe to comments
Be notified of
1 Comment
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Cam
1 year ago

A great policy that was critical to many people surviving covid financially.