AUSTRALIA - Allowing under 40s to be given access to their super fund prior to retirement age is highly unlikely to encourage saving among young Australians, said Tasplan's general manager, Neil Cassidy (pictured).
A current parliamentary inquiry submission into boosting superannuation savings argues superannuation is an unattractive option for young Australians and that by giving them access to up to half of their voluntary super contributions, super could be a more attractive saving option.
The key aspect of the recommendation is the proponent, Mercer principal David Knox, who believes access should be limited to those under 35 - leaving compound interest 25 years to run to age 60 on the remaining half of a person’s voluntary contributions.
Cassidy was unconvinced this would attract enough attention and asserted a better approach would be for the government to protect the savings of young Australians and lower contributions tax leaving more in the pocket at the end of the month.
The introduction of some form of national insurance scheme might help to ensure that insurance premiums were kept to a minimum; whilst a reduction in the contributions tax to 10% would provide young people with a big incentive to start saving earlier, according to Cassidy.
In reaction to the current House of Representatives Inquiry, Cassidy said: “The situation is balanced on a knife’s edge. Something positive needs to happen to convince the young that super is a good deal.
“On the one hand our surveys tell us that young members see retirement savings as their own responsibility, however they are also mistrustful of government.”
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