Pessimism grows in young super members
A survey commissioned by industry super fund, Rest, has found its younger members are more pessimistic about their super balance than the average member despite being decades away from retiring.
Close to three-quarters of the fund’s young members (73 per cent) who were experiencing financial stress as a result of cost-of-living pressures said it is impacting their mental health.
Increasing costs of bills (81 per cent), difficulty to save for a house deposit (70 per cent), rent costs (62 per cent), debt (54 per cent) and job insecurity (48 per cent) were noted by the survey as the key pressures young members are currently facing.
Over half Rest’s young members (51 per cent) said they are concerned they will not have enough super to retire, despite being decades away from their retirement phase. Younger members were also more likely to be worried about the future (27 per cent) when compared to the average Australian superannuation member (20 per cent).
“This research paints a sobering picture of the experience of our young Rest members and the short- and long-term effects of biting cost of living pressures on young Australians,” Rest CEO, Vicki Doyle, said.
“We know superannuation is not always front of mind for young people and encouraging them to engage with their super is a perennial challenge.
“However, we do not want this current level of despondency to lead to many more young people disengaging entirely from their financial future which would make the challenge even more difficult. We want the superannuation system to give all members, including young members, the best-possible retirement outcome.”
Over 55 per cent of young members responded that they are struggling to achieve their desired financial goals and outcomes, while 50 per cent said they often feel stressed about covering their everyday financial needs.
However, the research also showed how understanding and engaging with super can help young members to feel more confident about their futures. Doyle said initiatives such as removing the $450 monthly income threshold and the introduction of payday super and the progress toward reforming contributions on paid parental leave has worked to build the confidence from the start of the super journey.
“The experience and needs of young people should not be forgotten when it comes to considering the future of superannuation in Australia,” Doyle said.
“Super funds must be part of the solution here. Our research shows that, when they do engage with their superannuation, members can feel more confident about their future. Earlier and more regular engagement can lead to better retirement outcomes.
“This is why it’s so important that funds make it simple for members to access and understand their superannuation, and provide seamless experiences through digital advice, apps and online customer service.
“But funds can’t do it all. We should look for every opportunity to work to make the super system fairer and more equitable for our young members’ futures. We will continue to surface these perspectives to ensure issues of intergenerational equity are not overlooked by policy makers and other stakeholders.”