Uncertainty turning youngsters off super
More than 10 years of constant debate about superannuation regulation has forced many young people to stash their cash elsewhere, according to one accounting and advisory firm.
William Buck said it was seeing more young people invest outside the super realm where they had more certainty over access and control of their assets.
"Young people are aware that the rules that apply to the money they put in today are unlikely to be the rules that apply in the future," head of wealth advisory focus group for William Buck, Chris Kennedy said.
"Their major concern is how superannuation will be taxed in the future and when and how will they be able to access it."
Media debates and government policy manoeuvres mean young people hesitate to contribute more than the compulsory 9.25 per cent into their super, he added.
"The incentives, such as salary sacrifice limits, have fallen significantly in recent years."
The significant asset base in super funds now creates income that is taxed as low as 0 per cent for those funds paying a pension, and Kennedy believes this is not sustainable.
"Young people quite rightly feel that with the ageing population, the Government may need to gain a greater stream of income from the fund and that's creating a long-term fear," he said.
People need to know that having money in super is a smarter move tax-wise than allotting money outside super.
"Whether that's possible when such a large asset pool sits at the mercy of the Government's changing agenda, remains to be seen," Kennedy said.
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