Australian families could lose nearly $250,000 in retirement savings if the increase to the superannuation guarantee is dropped, new analysis by Industry Super Australia (ISA) showed.
A number of federal backbenchers have pushed for the government to abandon the legislated increase from the rate’s current 9.5 per cent to 12 per cent, particularly after the Grattan Institute opposed the rise, saying it would cause a reduction of wages.
The Grattan analysis showed the average worker could stand to sacrifice up to $30,000 over their lifetime in wages for super.
However new figures from ISA have displayed that if the guarantee was frozen at its current rate, a 30-year-old male earning $85,000 a year would stand to lose $147,000 from their super by the time they retire.
Separately, a 30-year-old earning the same salary was shown to potentially lose $93,000 by retirement.
For a local family, by the time they reach retirement, they were calculated to lose $240,000 in savings.
Independent research commissioned by the association found the majority of consumers, close to 90 per cent, support an increase in super contributions.
ISA chief executive Bernie Dean said the increase was an election promise from the Morrison government and to drop it would go against community sentiment.
“Australians should ask their local MP whether they stand by their promise to increase super contributions, or if they are happy to break their promise and deny families the extra money they are entitled to,” Mr Dean said.
“Cutting the super increase will cost families around the country hundreds of thousands in retirement savings. Australians will be left struggling to make ends meet in retirement, or will be forced to work until they drop before they can retire.
“If the government breaks its promise on super everyone loses. The government needs to reassure Australians that their retirement savings aren’t at risk.”
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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