Key Points
- One in three Australian workers in their 20s, 30s and 60s have been underpaid super in 2021-22.
- A typical worker could be $30,000 worse off at retirement.
- Australia’s $3.9 trillion superannuation system provides a safety net to retired workers.
What’s unpaid super?
Australia’s $3.9 trillion superannuation system is designed to afford financial security to workers when they retire.
For a typical worker, this could mean more than $30,000 less at the time of retirement.
Which ages are impacted more by unpaid super?
Around one in three Australian workers in their 20s, 30s and even 60s are likely to fall behind in building their retirement fund because their employers are not making the correct contributions to their chosen fund.
Those in insecure jobs, lower income earners, migrants, younger Australians, and those nearing retirement are more likely to be affected by unpaid super. Source: SBS News
Nearly 31 per cent of workers in their 20s and 28 per cent in their 30s are likely to be impacted.
This report has grim news for workers looking at retirement too.
The report states that many Australians over the age of 60 continue to work because they can’t afford to retire.
The report shows that almost 28 per cent of Australians in their 60s are also more likely than average to be impacted by unpaid super. Source: SBS News
How does unpaid super impact retirement?
This means that missing out on super early in their working life deprives younger workers of the full benefit of decades of compounding returns.
A average worker who is underpaid in super could miss out on 6 to 7 per cent of their super balances when they retire. Source: SBS News
The impact of unpaid super entitlements accumulates over time and substantially reduces the balances of Australian workers at the time of their retirement.
A typical worker in the lowest 20 per cent of the wage bracket who is underpaid super throughout their career could be $35,000 worse off at retirement.