The Association of Superannuation Funds of Australia (ASFA) undertook a study which showed overwhelming support in favour of SG increasing to 12%. Currently employer’s need to contribute 9.5% to an employee’s superannuation, however the research from 1,375 Australian’s found that the vast majority want it increased despite wage growth fears.
The superannuation guarantee has been stationary at 9.5% since July 2014, but the ATO is legislated to make small increments yearly until it reaches 12% in July 2025. RBS Governor, Phillip Lowe, stated in August that the increase “...will certainly have a negative effect on wage growth”. Lowe along with others believe that if an SG increase occurs it will come at a trade-off to higher wages. It begs the question – income now or income later?
One could assume that there may be discussions in the upcoming months regarding the legislated schedule and whether it will be delayed due to the current pandemic, though we will not be certain until any announcements are made.
Superannuation Guarantee Percentage:
- July 2021 = 10% SG
- July 2022 = 10.50% SG
- July 2023 = 11% SG
- July 2024 = 11.5% SG
- July 2025 = 12% SG
The research illustrated that:
- 42% of respondents said they would prefer to live on their accumulated super and savings alone through retirement.
- Whereas only 1/3 of respondents were confident that they would have enough to achieve a comfortable lifestyle during retirement
If you would like assistance with ensuring you can maintain your lifestyle throughout retirement please contact your closest Chase Edwards office today!