Members wear the cost of risk-profile errors

New MLC research says members are missing out on hundreds of thousands in savings


By Sarah Kendell

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Superannuation fund members are missing out on hundreds of thousands of dollars in retirement savings by having their account set to the wrong investment option for their circumstances and stage of life, according to new research from MLC.

The group’s latest “Wealth Sentiment Survey” revealed one in four consumers, and almost half of women aged 18 to 29, did not know what risk profile their super account was set to, meaning they could be more conservatively invested than was necessary.

MLC said the statistics were particularly concerning for female savers given women already had 44 per cent less money in their super than men.

The group’s general manager of customer experience, Lara Bourguignon, said the super industry needed to improve its engagement with members to ensure they were getting the most out of their retirement funds.

“Being in the right super risk profile is one of the key factors that will determine how much you have when you retire, but it’s often overlooked,” Bourguignon said.

“As an example of the difference it could make, a woman aged 25 on $80,000 a year in a conservative risk profile until she’s 70 could improve her super balance by around $294,000 if she adjusted her profile according to her circumstances and life stage.”

She recommended fund members get in touch with their super fund to ensure they were in the suitable investment option for their age and ensure it was amended if that was not the case.

When it came to building a higher super balance quickly, the survey indicated Australians were unlikely to be able to rely on increases in salary to do that as one in three consumers did not expect their income to change in the next few years and 15 per cent expected a decrease.

The results also revealed a significant proportion of consumers were unable to put away enough savings each week, with 19 per cent saying they had saved nothing over the past few years and 26 per cent saying they had only saved between 1 per cent and 6 per cent of their income.

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