Keeping an eye on the super balance is something most Aussies are accustomed to as they work to save enough funds to live a happy retirement but a new study has now revealed that a large chunk of workers have no idea that they have more than one active account.
A poll commissioned by Industry Super Australia and conducted by research company UMR has revealed Australians with super significantly underestimate the existence of multiple super accounts. In fact, only one in seven, or 15 per cent of people polled were aware that they have more than one.
On top of this, the Productivity Commission has found a whopping 40 per cent of people have multiple super accounts, meaning up to 25 per cent of people, or one in four Australians, with multiple super accounts may not actually be aware they have several.
According to researchers the surprising figures could explain why 70 per cent of those polled were in support of the government taking action on multiple accounts by ensuring individuals just have one open at a time. A total of 71 per cent claimed they’d like for their super accounts to be combined automatically when they change jobs, while 69 per cent agreed it would be a good idea to allocate them to a single fund for life.
However, there were still some concerns about the government’s plans including a fear of getting stuck in a poor performing fund, with 71 per cent of respondents agreeing that default funds should be good quality, with low fees and a history of good performance.
On the other hand, just 30 per cent of respondents were in support of a less regulated, choice framework, where employers can use any fund they want as their default fund, regardless of how good it is.
Speaking about the results, Industry Super Australia Chief Executive Matthew Linden said it reinforced the need for the government to stop multiple accounts and implement reforms that enhance consumer protections, not undermine them.
“The last thing chronically disengaged consumers want to worry about is trying to consolidate old super accounts,” he explained.
“Nor do they want to get to retirement and wake up to the fact that they have lost hundreds of thousands of dollars through duplicate fees and premiums.
“These results confirm there is overwhelming support from consumers for government to step in and find a way to eliminate multiple accounts for good, so that everyone can have confidence their super is in the one place, in a high performing fund earning good results.”
Like most Aussies polled, Linden agreed automatically consolidating or combining a person’s super every time they change jobs into a single, quality checked account was the most appropriate solution.
“It will take the hassle out of super for disengaged consumers and will mean more returns and more money and security for hardworking Australians in retirement,” he added.
“Condemning a person to a single fund for life, regardless of performance, could see people end up hundreds of thousands of dollars worse off by the time they retire if they are stuck in a dud fund.”
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