Superannuation surveys shows many Australians are not clear about their retirement options

Published 12 October 2020

New statistics show many superannuation members are not sure if they will have enough to retire on and are not clear about how much they are paying in superannuation fees.
Surveys by the FSC (Financial Services Council) and ING Direct pointed out that of the 1000 employee surveyed about 66% of them felt that the fees charged by their super fund were not clear and almost 50% of them did not know what fees they are paying at all.

Rainmaker is a leading research house that provides statistics on the financial services industry. In their recent report they determined that Australians are paying over $18.6 billion in fees to their super funds based on the last financial year to June 2013. If we look at the working age population of Australia (age 15 to 64) thats 15 million people paying on average $1,240 per annum in fees.*

The survey results suggest that many Australians do not know enough about their superfunds or have a proper retirement strategy. Again looking at the responses 46% said they need $500,000 for a comfortable retirement while 38% said they needed over $1 million for a sufficient retirement.

In either case it's alarming to know the average super balance for men and women according to the survey was between $112,000 to $198,000 which is way below what most expect to retire on.  This was more apparent as just over 60% of those surveyed said they will not have enough in superannuation when they retire.
According to Rainmaker the range of average fees paid in superannuation funds equates to 1.23% p.a. This was actually lower than the previous figure of 1.31% back in 2007. The reason behind this accordingly is due to the movement of funds from higher costing retail funds to lower cost not for profit funds and self managed super funds (SMSF's). For example a superannuation fund with a balance of $200,000 would have an average fee of $2,460 per annum.

Industry based funds remain competitive according to the FSC industry fund fees as whole if expressed as a percentage of assets, were 1.2 per cent on average for the financial year ended 2011. These types of funds typically provide access to diversified investments, fund administraion, reporting and access to some education or basic advice.

However the contention isn't just about price, it's also about choice and control. From further research and in interviewing with over 500 members of My Money Calculator the trend suggests that many are preferring bricks and mortar over other investments due to the lack of market performance of other asset classes, lack of transparency of their super funds and future volatility.

SMSF's are clearly becoming an  important choice for many Australians retirement funding, for the June 2013 quarter alone, there were 6031 new established SMSF's setup (almost 67 SMSF's setup per day) according to the ATO.

Learn more about your superannuation options by reading our guides or asking an expert.

(*According to the ABS as at June 2011, there were 15.0 million people of working age 15 to 64 years)

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