The reason why so many people have made use of the Government’s hardship early access superannuation release may have been substantially identified by new research revealing that 42% of people have been negatively financially impacted by the COVID-19 pandemic.
What is more, the research is pointing to a further surge in people seeking early access to their superannuation if and when the Government winds back JobSeeker and other initiatives.
The research, undertaken by State Street Global Advisors, is part of the company’s Global Retirement Reality Report and found that 42% of respondents said they had been negatively impacted financially by COVID-19.
What is more, Australians appear to have been more financially affected by the pandemic than people in other countries covered by the survey such as the US, the United Kingdom and the Netherlands.
It found that 67% of Australians had been impacted at work in some form, such as having reduced pay or reduced hours.
“Given that a significant number of savers have seen an impact to their jobs and the income they receive, it is not surprising that almost 42% of our sample felt that they were worse off financially compared with before the outbreak,” the SSGA research said.
Hardly surprisingly, this has translated into confidence in people believing they will have enough to retire on with some stating that while they believed the actual pandemic would be short-lived, they were concerned that it would take time for their superannuation balances to recover.
The survey also seemed to reflect the negative impact of recent speculation around the future of the superannuation system, with respondents citing uncertainty about their retirement plans coupled with a lack of trust in the retirement system.
The research analysis noted that in Australia, the government allowed individuals who were financially affected by COVID-19 to access their super early and that the survey had revealed that 8% of Australians had accessed this facility, which was more than twice the global average.
“The economic fallout from the crisis has not finished, so how many more Australians will need to draw down early on their super? No one knows that yet, but another critical reflection point for members accessing their super early will be when the country’s current JobKeeper subsidy is either reduced or stopped completely,” the analysis said.
