Half of us are struggling financially and view superannuation as a ‘lifeboat’

More than one in two Australians are experiencing some degree of financial difficulty, but most believe super safeguards their wellbeing, a study shows.

Many people are experiencing some degree of financial difficulty, but most believe super gives them more confidence about their future finances. Picture: iStock

Just over half of Australians are struggling financially but most view superannuation as “a lifeboat” for their future finances, according to super industry-commissioned research.

An Essential Research survey conducted for the Super Members Council found that 53 per cent of people are experiencing some degree of financial difficulty.

Essential Research said the proportion of people under financial pressure was consistently high throughout 2023, and was up from 39 per cent in mid-2022.

A third of people felt financially secure and usually had spare money for savings or buying luxuries, and another 13 per cent described their position as comfortable, without concerns about paying bills.

The biggest group, representing 39 per cent of survey respondents, said they were “struggling a bit” and were having to watch their budgets to ensure there was enough money to cover all their bills.

Another 14 per cent described themselves as being in serious difficulty, and being able to pay all their bills was a regular concern.

Super Members Council executive general manager of advocacy Georgia Brumby said while cost-of-living pressures were hitting family budgets, superannuation gave them a feeling of certainty and future financial security.

“More Australians are feeling the economic pinch right now, but super is seen as a lifeboat through today’s economic turbulent waters,” Ms Brumby said.

The survey showed 58 per cent of people agreed that their superannuation helped them feel more confident about their financial wellbeing.

Among those experiencing financial difficulty, 54 per cent said super gave them confidence about their financial wellbeing.

Overall, 55 per cent of respondents who had superannuation agreed that super was a low-cost way to build savings.

The same number believed super funds had performed strongly over the long term, while just under a third had a neutral response to that question.

Research house Chant West predicted the median growth super fund would return 8.8 per cent for 2023, helped by a sharemarket rally fuelled by tech stocks and expectations of lower rates.

The Super Members Council, a lobby and policy body set up last year to represent the profit-to-member superannuation sector, is calling for stability in super policy this year.

“The Super Members Council wants the super system to work in the interests of all Australians to deliver the very best outcomes in retirement,” Ms Brumby said.

“This means ensuring super policy remains stable, effective and equitable, while safeguarding its foundations of preservation, universality and compulsion.”

Industry leaders expect super funds will come under increasing pressure this year to develop policies to cater for the millions of Australians moving into retirement, The Australian’s 2024 CEO Survey revealed.

Ms Brumby said super was transforming the lives of people in retirement, but many women and those in lower paid or less secure work were at risk of falling between the gaps.

“Bigger, longer-term structural change is needed to make the system fairer,” she said.

“Paying super on the Commonwealth Parental Leave Pay scheme is a small but immediate step the federal government could take to improve gender equity and women’s retirement outcomes – and we urge the government to deliver this in its upcoming budget.”

Ms Brumby also urged people to check on their super during the summer months, saying it could really pay off in the long term.

“Previous research shows those who take an interest in super are happier with their fund’s investment performance, so we would urge all Australians to check-in with their fund to make sure they are getting the most they can from their super.”

The council’s check-in tips include consolidating super funds into one account, making sure you are being paid all of your legal entitlements, checking you are with a top-performing fund in terms of investment returns after fees, and for those who are financially able to, making extra contributions into super.