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Retirement

How compulsory super champions low-income earners

  • June 29 2020
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Retirement

How compulsory super champions low-income earners

By Grace Ormsby
June 29 2020

Compulsory super has provided Australians with better savings and living standards since its inception – especially for low-income earners, new research has shown.

compulsory super champions

How compulsory super champions low-income earners

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  • June 29 2020
  • Share

Compulsory super has provided Australians with better savings and living standards since its inception – especially for low-income earners, new research has shown.

compulsory super champions

Analysis from The Association of Superannuation Funds of Australia (ASFA) has found that the system “delivers tangible benefits to households across the income spectrum”, but it is of “extraordinary benefit to low-income earners in particular”.

The research has revealed that Australian households now have $500 billion in savings that they would not have otherwise saved, thanks to the scheme.

Of that, approximately $35 billion is comprised of the additional savings of workers in the bottom 20 per cent by income.

It also found that “compulsory superannuation has unambiguously improved the asset diversification of Australian households’ balance sheets”.

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According to ASFA CEO Dr Martin Fahy, “The strength of Australia’s superannuation system is evident from the important role super is playing to help provide both short-term financial relief to people hardest hit by the COVID-19 crisis and investment capital critical to the economic recovery.”

Dr Fahy added that “Australians value a fair go for all, and we don’t leave people behind.”

“The research shows that superannuation shares the benefits of long-term wealth accumulation across our society and gives everyone the opportunity to retire with dignity.”

The CEO highlighted how compulsory superannuation enables all Australians to “share in the prosperity that is built on the backbone of their hard work sacrifice”.

“This must never be the preserve of the wealthy elite.”

ASFA also revealed that in the context of an ageing population, compulsory superannuation improves the sustainability of the Age Pension and takes pressure off of future federal government budgets.


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About the author

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Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

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