Research reveals majority of Aussies don’t trust super funds

There’s an “overwhelming” lack of knowledge and understanding of superannuation across the board in Australia, new independent research reveals.

The majority of Australians do not like, understand or trust superannuation providers, independent research by money educator and expert Vanessa Stoykov reveals.

“With 9.5 per cent of your before-tax salary being contributed to super, this lack of understanding is costing the everyday Australian thousands of dollars,” Ms Stoykov told news.com.au.

Only one in three Australians – 30 per cent – in the 1500-people survey trust superannuation providers and value their advice and an even smaller cohort of 15 per cent cite superannuation funds as key to preparing for their financial futures.

More than a quarter – 27 per cent – of Australians are confused about what superannuation providers actually do with the funds.

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Finance educator Vanessa Stoykov is concerned about the lack of knowledge, understanding and trust Australians have in superannuation.

A total of 10 per cent say they don’t trust superannuation funds while 9 per cent don’t like superannuation funds due to a lack of ethical transparency.

Millennials have the lowest level of trust when it comes to providers, while Australians aged 60 and above see more value in superannuation funds, the research reveals.

“We see Australians starting to care about their superannuation when they are considering their retirement options. This is when they really need their superannuation, so they come to learn a lot more about their funds, and put trust in the advice they are provided with, which may simply be too late for many,” Ms Stoykov explained.

“What is really concerning, however, is that across the board at every age group and all income levels, there is an overwhelming lack of knowledge and understanding of superannuation.”

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The research showed that Millennials have the lowest level of trust in providers while over-60s are more trusting.

Despite this, less than one in ten Aussies – just 8 per cent – feel they should be able to control their own finances.

“We can see that Australians don’t trust themselves when it comes to saving for their future, but they also don’t trust superannuation, which is a real conundrum,” Ms Stoykov added.

“What might seem like a distant concern right now has the potential to significantly impact life down the track, so the sooner Australians can educate themselves about their superannuation options and make a choice they feel comfortable with, the better for their long-term financial outcomes,” she said.

Educating yourself now about superannuation can pay off in the long-term, according to Ms Stoykov.

Ms Stoykov added that superannuation is “the most important investment option by far”.

“Many Australians are saving or even withdrawing money from their super funds to purchase property, but they don’t realise that super is the most important investment option by far. In a nutshell, your super will become the house of the future,” she said.

“The research highlights how most Australians only start to care about superannuation later in life, and by then, it’s simply too late.”

Ms Stoykov’s tips to learning more about superannuation and deciding if your current super fund is right for you include educating yourself.

Ms Stoykov said the first step is informing yourself about super and providers. Picture: iStock.

GET INFORMED

Ms Stoykov suggests looking up the independent research company SuperRatings to see which super fund is ranked among the top 10 performers. The ratings also reveal the lowest fees and various insurance options.

“You need to know your facts before you can decide what the best choice is for you,” she explained.

DOWNLOAD YOUR SUPER FUND APP

Most of the big super funds will have an app which allows Australians to easily see where they’re at with their superannuation.

She suggests downloading the app on your phone and let it send you notification updates.

“Nothing gets you more interested that receiving a text that your employer just put $500 in your account – it means you are investor and are investing in your future,” Ms Stoykov said.

It’s a good idea to consolidate your accounts and review them regularly.

UNDERSTAND YOUR MONEY MOTIVATORS

Ms Stoykov said it’s important to ask yourself questions about what motivates you with money. “Why are you not interested? Do you have instant gratification issues with money?” she asks.

“Seek to understand yourself better via learning. The more you understand your ‘why’ the easier it will be to make better choices,” she said.

Ms Stoykov has some simple tips to quickly grow your super balance to help prepare for the future.

CONSOLIDATE YOUR ACCOUNTS

“It sounds obvious, but over six million Australians have more than one super fund, and many of those are inactive,” she explains.

“By rolling your balances into one, you will only be paying one set of fees which could save you hundreds of dollars each year and even thousands over many years.”

It can take just five minutes to review your super account.

REVIEW YOUR ACCOUNT

Ms Stoykov suggests it takes just five minutes to review your account which can save you a lot of money down the track.

“People get complacent and forget about their super balance. By spending a few minutes every year and assessing the fund’s performance, the fees, the investment options and insurance that are covered, you could be saving thousands,” she explained.

TAKE ADVANTAGE OF YOUR COVER

“Most people don’t know that their super funds offer services you would otherwise pay for,” Ms Stoykov explained.

“For example, many provide free financial guidance, so it’s worth calling your super fund to ask what they offer and make use of these tools to better your financial situation.”