More than 1.2 million Queenslanders will benefit from a boost to their nest egg as the super rate increases to 10 per cent, with young workers and low to middle-income earners the big winners.
From this month an extra $222 a year will flow into the super accounts of the average Queensland worker.
This annual super boost may be small, but it will make a big difference at retirement – with a 30-year-old on the median wage expected to have an extra $19,000 at retirement, a couple will have an extra $38,000.
Queenslanders will get an extra $279 million in super landing in their accounts over the next 12 months.
The state’s young workers will be the biggest winners, as more than a quarter of Queenslanders getting the extra payments are in their 20s. The extra contributions are vital to young workers after they were encouraged to drain their super savings to support themselves through the Coronavirus downturn.
Industry Super Australia Chief Executive Bernie Dean said the changes will be a big boost for people right across the state.
“These small increases will add up to make a huge positive difference for Queenslanders when they retire,” he said.
“Young people will be the big winners from these increases and help those that raided their super last year, during the downturn, make up some of the lost ground.
“This is the first of a number of increases the government has promised and locked in law for the coming few years.”
Industry Super Australia’s analysis of tax file data shows that about 52 per cent of those who will benefit from the SG increase are on wages less than $55,000 – many of these 658,000 workers are in line for a five-figure boost to their retirement savings.
The super rate is legislated to rise from 9.5 per cent to 12 per cent by 2025 through annual 0.5 per cent increases. At the Budget this year the government re-committed to its election pledge to stick to legislated schedule – this commitment will deliver an extra $85,000 to the typical workers’ retirement savings.
The increase to 12 per cent will also:
- Add $170,000 to the retirement nest egg of the average 30-year-old couple;
- Save $33 billion in Age Pension costs over coming decades;
- Inoculate retirees from future adverse changes to the Age Pension;
- Add $12 billion to Australia’s GDP, create 10,000 jobs and increase real wages, according to research from independent consultants ACIL Allen.
The Superannuation Guarantee is a critical response to the ageing population and improves retirement incomes of working people in a fiscally sustainable manner.
Although still maturing, annual superannuation retirement benefit payments are already double age pension expenditures.