Young Australians tapping super early, running down nest eggs

A third of people tapping their superannuation accounts to get through the coronavirus pandemic are under the age of 30 and likely wiping out all their early retirement savings.

A breakdown of data released by Treasury reveals that as at May 11, of the almost 1.4 million people to have accessed up to $10,000 of their superannuation, more than 463,000 of them were under the age of 30.

A third of all people to access their superannuation early are under the age of 30.Credit: Nine

Almost 23,500 were under the age of 20 while another 172,100 were aged between 21 and 25. The single largest age group to access their super early were those aged between 26 and 30.

As part of its response to the pandemic, the Morrison government is allowing people to withdraw up to $10,000 from their super accounts this financial year and another $10,000 between July 1 and September 24.

The measure, which the government has described as a success, is expected to cost the budget more than $1.1 billion in lost revenue in the short term. Economists believe it will cost at least $300 million a year long term due to reduced superannuation balances.

Treasury, in response to questions from Labor as part of the Senate committee overseeing the government's coronavirus policies, revealed $11.1 billion had been withdrawn from super accounts.

More than half of all applicants withdrew the maximum $10,000 and 14,639 had their claims rejected, mostly as they had made multiple applications.

Almost $3 billion had come out of the accounts of those aged under 30. Among 26 to 30-year-olds, the average withdrawal was $8530.

While accounting for more than half of all people accessing their super early, people under the age of 35 took out 46 per cent of the cash that has so far been distributed.

The highest average withdrawal was among people aged between 56 and 60. This group, which numbered 58,500, had withdrawn an average $9402. The smallest withdrawal had been from those aged under 20 at $2838.

Labor's assistant treasury spokesman Stephen Jones says new figures on superannuation access shows a huge hit to the retirement incomes of young Australians.Credit: Lisa Maree Williams

The department, which said it had not done a gender analysis of the longer term impacts of the early withdrawals, revealed 772,300 men had withdrawn an average $8400. Another 581,700 women had accessed their super, with an average withdrawal of $7942.

Labor shadow assistant treasurer Stephen Jones said the figures showed many Australians had turned to their retirement savings before government support started to flow to the community.

He said the withdrawals by so many young people meant they would face long term financial impacts.

"Industry analysis estimates that a 20-year-old who accesses the full $20,000 available under the scheme could lose more than $120,000 from their retirement balance," he said.

"A 30-year-old who accesses $20,000 from super now could lose about $100,000 when they hit retirement, and a 40-year-old could lose more than $63,000."

The government was forced to temporarily freeze the access scheme earlier this month after revelations the federal police were investigating claims more than $100,000 had been stolen from up to 150 superannuation accounts by "sophisticated" criminals.

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