Super sceptical

There’s a revolt underway in consumer land as Australians from all walks of life vote with their feet and shun superannuation in favour of personal savings and other investments.

Some push-back is to be expected given account balances struggled to fight the pull of gravity over the last two years, falling lower and lower for what seemed like an eternity to most members.

But what’s really interesting is what’s driving the distrust and scepticism of super.  It’s not so much the performance of funds during the financial crisis but instead a fear that the Government will change the rules.

This message came through loud and clear in a recent Focus Group held by CoreData with pre and post-retirees aged 50 to 70.

Brad, a 55-year-old male, says he’s never trusted super because he doesn’t trust the government. He says successive governments keep “changing the laws arbitrarily” and we’re in for another wave of that this year with the election looming.

Brad is not alone in his line of thinking. Indeed there was wide consensus around the table that super is not the safe haven that the industry would have you believe, and while there are tax incentives to saving through super, this is irrelevant if the goal posts keep shifting.

Bruce, a 52-year-old male, thinks relying on super could cause him big problems in retirement. He’s developing his assets outside of super as well because he’s convinced that the Government has dug itself “such a deep debt hole” that they’ll use the superannuation system to recoup that.

The building scepticism is reflected in a recent study by CoreData which found superannuation is the number one financial concern for the average Australian.

Super, including fund rollover, Government super policy, planning for retirement, retirement income options and pensions, ranked ahead of tax, family financial matters, paying off loans, investing and saving.

Industry bodies such as the AIST, ASFA and IFSA have recently repeated calls for a hike of Superannuation Guarantee (SG) to 12% to avoid a $695 billion retirement savings gap.

One Comment on “Super sceptical”

• February 11, 2010 at 10:52 am
  MorcDM says:

  I cannot believe what I just read….you acknowledge that consumers don’t like your offerings because several reasons, not just Government instability, so to keep the numbers up your want to change the legislation to force people to increase their contributions.
  Already there is enough bias in the tax system in favour of Super and really it is about time other forms of savings should be granted more favourable treatment.
  This is nothing more than “feathering your own nest” by forcing people to use these products by making them so advantageuosly favored by taxation.
  Level the field and then maybe we will see products people acrually like AND undestand come onto the market.
  Don’t forget YOUR surveys consistantly show 50% of people have never used a finacial planner and 50% have. Of the 50% who have, half of them won’t use the profession again.
  On another subject that needs cleaning up,
  perhaps an investigation into the tax treatment of share trusts would be a good start, something the Finacial Planning Assoc. has ducked for years.

  dm…

  PS
  Have you no comment on Trio Capital (In Albury NSW). An interesting story.

  Reply