Economic pressures prompting Aussies to trim spending, while boosting super

• A new survey by Equip Super has revealed six in seven Australians are being more cautious about spending, due to cost of living and inflation pressures
• 40% of those surveyed said it was crucial to boost retirement savings in uncertain times
• Two thirds of Australians say they are planning to make additional super contributions

Two in three Australians plan to put more into their super through voluntary contributions in response to the challenging economic climate, according to independent research on Australians' retirement concerns, commissioned by leading fund Equip Super.

Six in seven Australians (85 per cent) said they were being more cautious about how and what they spend money on, given the rising cost of living and inflation pressures. The survey found one in five were investing less money than usual.

Forty per cent of those surveyed nominated the primary reason for wanting to increase their super contributions as being it was “crucial to boost my retirement savings in uncertain times”, 9% nominated that additional super contributions would maximise returns and increase retirement savings. Another 16% said they wanted to take advantage of the tax benefits of increased contributions.

Concerns about the current economic uncertainties meant 14% of respondents said they wanted to keep their funds accessible, rather than put them towards super. Only five per cent nominated the main reason for not increasing their super was that their current level of super contributions was sufficient to meet their retirement goals.

Paul Stocker, Head of Advice at Equip Super said increasing super contributions had a substantial and beneficial long-term impact on retirement.

“It's completely understandable that everyday Aussies are feeling the pinch of rising costs. Over the past several years we've navigated through unprecedented times, from the far-reaching impacts of the pandemic to the surge in inflation and interest rates, all of which have undoubtedly impacted household finances,” he said.

“While it makes sense to trim some spending to alleviate immediate financial pressures, it's crucial to recognise the enduring importance of maintaining a focus on long-term financial security. Even small super contributions can have a positive impact on retirement, as the value of those contributions compounds over time.”

In preparation for retirement, 34% of people said they were already making extra super contributions, 38% were paying off home loans and 46% were reducing their debt.

Equip Super’s survey questioned more than 2,000 Australians, randomly selected across the nation.

The survey showed a significant shift in perception among working Australians, with more than half recognising the heightened importance of their super in light of escalating living costs and inflationary pressures. Nearly half of respondents (47%) expressed apprehension regarding their super fund's performance, reflecting a broader unease about their future financial stability.

More than half of those surveyed indicated they would use financial planning services if they were available from their super fund.

Stephen Morley, a 60-year-old retired petrochemical fitter and turner, is now reaping the rewards of his strategic retirement planning in his younger years. At 57, a back injury forced him into an early retirement but luckily, he was prepared.

“I’d been putting a little bit more money into my super since my first day of work in this role, more than 30 years ago. I’ve always had a long-term outlook, and it’s now paying off.”

Stephen’s retirement goals were modest. He wanted a comfortable lifestyle with no money concerns. “I didn’t want to be comparing prices in the supermarket and worrying about paying my bills. I also wanted to do a bit of travel after I’d finished working.”

When injury first forced Stephen to retire, he turned to his Equip Super financial planner who was able to set up his finances and help him receive his pension early. The planner took care of Stephen’s holistic financial situation, organising his super, and advising him to update his will and power of attorney.

“My financial planner was fantastic. Not only did they assist me when I needed them the most, they completely alleviated any concerns I had about retiring early and having enough super to fund my future.”

There are multiple benefits in having a financial plan, especially during times of economic stress, Mr Stocker said. “It ensures you are on track and saving with purpose. It's not just about budgeting effectively; it's about cultivating a mindset of financial empowerment and taking intentional steps towards a more secure future."

Mr Stocker added: “Equip Super acknowledges that every dollar matters, particularly in today's economy. However investing in your future financial security, lays the groundwork for sustained growth and compounding financial returns. We are here to help you strike a balance between meeting current needs and safeguarding your long-term financial wellbeing.

We urge Australians to be aware of the benefits of long-term retirement planning,” Mr Stocker said. “All Equip Members have access to free general super advice. Members who require comprehensive advice regarding finances can also speak with one of our qualified financial planners (fees for this service may be deducted from your super balance rather than paid from other sources).”

Equip Super runs local seminars and events to support members throughout their super journey. Online retirement calculators are also available to help members plan ahead. For more information on super and retirement, along with online education videos, please visit equipsuper.com.au/tools-and-resources.