About 80 per cent of Australians support an increase in super contributions to 12 per cent as 51 per cent believe they will not have enough for retirement, according to a report.
The Financial Services Council (FSC) and ING Direct “Your Super Future” report found although 88 per cent of workers support the current super system, 55 per cent will use additional income sources to supplement their super.
Almost half of the workers surveyed in the report said they believe up to $500,000 will be enough to provide them with a comfortable retirement, while 39 per cent say $1 million or more is the right amount.
FSC chief executive, Sally Loane, said with average balances still low there is scope to build more flexibility into the super system to reduce the gender divide.
“Australians recognise that periods of reduced or no workforce participation due to child or elder caring responsibilities play a key role in the gender gap, and they support more flexibility in the super system to help those who have taken career breaks to build their retirement savings when they can,” she said.
“Research by Rice Warner for the FSC, shows an average Australian woman must contribute 18 per cent of her income to super from the time she enters the workforce to achieve an adequate, self-funded retirement without the support of the age pension.”
Loane said the system needs to enable people to make contributions when they are financially able to close the retirement savings gap.
The report also found there was a growing awareness on the impact of fees, with 38 per cent saying fees are too high. Fees and better performance ranked equally (52 per cent) as the most common reasons for switching funds.
Commenting, ING’s chief executive, Vaughn Richtor said “I am particularly pleased that increasingly Australians are considering switching their super funds to get a better deal of fees, performance, and transparency”.
“It shows people are taking more control of their retirement savings,” he said.
