Australian workers can look forward to a bigger nest egg, with an increase to the superannuation guarantee to add tens of thousands of dollars to the average super account.<\/p>\n
From 1 July, employers\u2019 minimum required contribution to employees\u2019 superannuation accounts will rise from 11.5% to 12%.<\/p>\n
It is the latest and last in a series of incremental increases from 9% over more than a decade since they were legislated by the Rudd-Gillard Labor government in 2012.<\/p>\n
With the latest bump, a 30-year-old earning $60,000 would have an extra $20,000 in super by retirement, according to the Association of Superannuation<\/a> Funds of Australia.<\/p>\n It will add about $300 each year to the superannuation of a worker on a $60,000 salary, or $500 for someone on a $100,000 salary.<\/p>\n \u201cThe system foundations are cemented for young, working people to have a comfortable retirement,\u201d the ASFA chief executive, Mary Delahunty, said.<\/p>\n \u201cIt\u2019s a moment all Australians should be proud of.\u201d<\/p>\n Sign up for Guardian Australia\u2019s breaking news email<\/a><\/strong><\/p>\n The association said the cost of a comfortable retirement had increased 1.6% in the past year, while the cost of a modest retirement rose 1.7%.<\/p>\n A \u201ccomfortable\u201d retirement includes top-level health insurance, a reasonable car and leisure activities.<\/p>\n The cost of either outcome was increasing slower than Australia\u2019s current 2.4% headline inflation but retiree budgets remained under pressure from rising food, energy and health costs.<\/p>\n Couples on average need $73,900 annually for a comfortable retirement, while most singles require $52,300 a year, ASFA says.<\/p>\n For a modest retirement covering the basics, couples needed $48,200 each year, singles $33,400, or for renting couples, $64,250, and $46,660 each year for singles who rent.<\/p>\n The figures underlined the importance of increasing Australia\u2019s housing stock, Delahunty said.<\/p>\n \u201cThey also illustrate how super can be the difference between hardship and stability later in life, especially for renters.\u201d<\/p>\n For some workers, the extra contribution would come from their existing pay package, according to CPA Australia\u2019s superannuation lead, Richard Webb.<\/p>\n \u201cIt\u2019s a good idea to check with your employer to see how they view the changes and what it means for you,\u201d he said.<\/p>\n skip past newsletter promotion<\/a><\/p>\n Sign up to Breaking News Australia<\/p>\n Get the most important news as it breaks<\/p>\n Privacy Notice: <\/strong>Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n Workers on contracts with a total remuneration package could see a slight drop in their take-home pay, while those on award or enterprise agreements would likely receive the contribution on top of their current pay.<\/p>\n When compulsory superannuation was introduced in 1992 \u2013 in part to reduce government spending on the age pension \u2013 only one in 10 Australian retirees listed super as a source of income.<\/p>\n Nine in 10 people between 30 and 50 now have super.<\/p>\n Government spending on the age pension<\/a> was projected to fall<\/a> from 2.3% of gross domestic product in 2020 to 2.0% by 2062-63, despite a doubling of the over-65 population and a trebling of over-85s over the same period.<\/p>\n However, the super guarantee increase would not help those who missed out on paid work for extended periods, the Super Consumers Australia chief executive, Xavier O\u2019Halloran, said.<\/p>\n \u201c(For) people who have caring responsibilities or who have been locked out of the unaffordable housing market \u2026 increasing SG further won\u2019t address those inequalities,\u201d he said.<\/p>\n O\u2019Halloran said there was more that could be done to support people struggling in retirement, when a significant portion of their autumnal years\u2019 savings were made.<\/p>\n \u201cRight now, there are no minimum standards for retirement products like there are for MySuper,\u201d he said.<\/p>\n \u201cThere is also no performance testing of retirement products, so super funds can still sell poor products.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Australian workers can look forward to a bigger nest egg, with an increase to the superannuation guarantee to…\n","protected":false},"author":2,"featured_media":201757,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,2499,16,15],"class_list":{"0":"post-201756","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-personal-finance","11":"tag-uk","12":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114719741941968920","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/201756","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=201756"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/201756\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/201757"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=201756"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=201756"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=201756"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}