New research has revealed that while a significant majority of Australians recognise the importance of superannuation for their future financial wellbeing, many lack a deep understanding of how it functions to grow their savings. According to a recent Pyxis Polling and Insights survey, 75% of Australians acknowledge the significance of super, yet a similar proportion are unfamiliar with fundamental aspects like the Super Guarantee rate and super’s low tax rate. Additionally, a third of respondents check their super balance less than once a year.
The survey, conducted in July with 1030 participants, highlighted that those with a good understanding of superannuation tend to be more engaged with their savings and feel more confident about their financial decisions. For instance, 57% of those who claim to understand super rate their fund’s performance positively. In contrast, 90% of individuals with a solid grasp of super feel assured about their finances, compared to just 60% of those with an average or below-average understanding.
Recognising this gap in knowledge, the Super Members Council has launched a new public awareness initiative called ‘How Super Works’. This initiative aims to educate Australians on the benefits and mechanics of superannuation through accessible messages, facts, and data presented by everyday Australians in relatable conversations.
Misha Schubert, CEO of the Super Members Council, emphasised the importance of this initiative, stating, “Nearly three-quarters of workers today weren’t in the workforce when super was legislated 32 years ago. It is timely to help more Australians understand how this system works for them and why it is the envy of the world. The more you know about super, and the more engaged you are with your super, the better you can make it work for you.”
Schubert also noted that superannuation often operates automatically, building lifetime savings for retirement, which can lead to it being overlooked, especially by younger individuals. “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,” she added.
The Pyxis survey also uncovered specific knowledge gaps among Australians. For instance, around one in three Australians correctly identified the current Super Guarantee rate of 11.5%, with just under half within 0.5% of the correct answer. However, 25% of respondents admitted to not knowing the current super rate. Moreover, three-quarters of Australians were unaware that super contributions are taxed at just 15%, and only 40% knew that retirement balances are primarily composed of compound returns from investments rather than the contributions themselves.
To address these gaps, the ‘How Super Works’ campaign features content on social and digital media, aiming to demystify superannuation and provide clear, simple explanations. Topics covered include the power of compounding returns, the light taxation of super due to its purpose for retirement savings, and the general workings of the super system.
“Australians value super. They trust it is delivering for them and know how important it will be for their retirement—for many people, it will be one of their largest assets,” Schubert remarked. “But super can seem complex, and the basics aren’t well understood by everyone. That’s why there’s a need for easy-to-understand explainers about how super works for people.”
The Super Members Council advocates for over 11 million Australians, who collectively have more than $1.5 trillion in retirement savings managed by profit-to-member superannuation funds. The Council’s mission is to protect and advance their interests, ensuring that superannuation policy remains stable, effective, and equitable throughout their lives.
Key Facts:
- Seven in 10 Australians do not know the super rate.
- Three-quarters of Australians don’t know that super contributions are taxed at just 15%.
- Only four in 10 Australians know that retirement balances are primarily made up of compound returns from investments.
For more information on the ‘How Super Works’ initiative, click here.
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