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Public knowledge and understanding of how super works remains low among Australians despite many regarding it as important for future financial wellbeing, according to the Super Members Council.
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SMC launches initiative to boost awareness about super
07 August 2024
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The Super Members Council (SMC) has launched a public awareness initiative, ‘How Super Works’, to aid in the education and understanding of the powerful benefits of super.
Seven in 10 Australians don’t know the super guarantee rate and 75 per cent could not nominate super’s low tax rate according to results from the Pyxis Polling and Insights survey conducted in July.
The results also highlighted knowledge about how super works to grow people’s savings remains low, with only one-third of Australians checking their super balance less than once a year.
SMC said Australians who have a thorough understanding of super and the way it works are more likely to have financial freedom and happiness.
The SMC initiative features ‘everyday Australians’ speaking about super to deliver accessible messages, facts and data about super and how it works.
SMC CEO Misha Schubert said the campaign is aimed to clarify super and help Australians maximise their superannuation.
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“The more you know about super and the more engaged you are with your super, the better you can make super work for you,” she said.
“Nearly three-quarters of workers today weren’t in the workforce when super was legislated 32 years ago – so it is timely to help more Australians understand how this system works for them – and why it is the envy of the world.”
The Pyxis Polling and Insights survey consisted of 1,030 participants and found those who understand how superannuation works are satisfied.
Fifty-seven per cent of these people said they are “in a good performing fund.”
Nearly 90 per cent of people with a sound understanding of super said it makes them feel more confident about their finances.
This is in comparison to 60 per cent of Australians who said they have an average or below average understanding of how super works.
Schubert said it is understandable why people don’t have the right knowledge, yet it is still important to provide superannuation education.
“Because super works automatically to help people build lifetime savings to deliver them income in retirement, it can be out of sight and out of mind for many, especially for younger people,” Schubert said.
“Understanding the basics of how super works strengthens people’s engagement with super and helps Australians get the most out of our country’s world-class super system.”
The Pyxis Polling and Insights Survey was conducted to highlight knowledge of the super system needs to be strengthened, despite trust in super being high.
Other findings include one in three Australians correctly nominating the current super guarantee rate of 11.5 per cent, with 48 per cent within 0.5 per cent of the correct answer.
One in four Australians aren’t aware of what the current super guarantee rate is, and three-quarters of Australians don’t know that super contributions are only taxed at 15 per cent.
Only four in 10 Australians know that retirement balances are usually made up of company returns from investments and not the super contributions made into super.
It was also revealed two in 10 Australians incorrectly believe that having any money in super at retirement makes you ineligible for the age pension.
Based on the results from the survey, Schubert said the lack of super knowledge needs to be tackled sooner rather than later.
“Super can seem complex and the basics aren’t well understood by everyone,” she said.
“That’s why there’s a need for easy-to-understand explainers about the power of compounding returns, how super is taxed lightly because it is saved for retirement and how super works for people.”
The SMC initiative is important based on the value super holds and the fact Australians trust it will be one of their largest assets in retirement, Schubert said.
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