MORE than 6.7 million Australians will benefit from a boost to their nest egg from July as the super rate increases to 10percent, with young workers and low to middle-income earners the big winners.
From July 1, an extra $233 a year will flow into the super accounts of the average worker. This super boost may be small, but it will make a big difference at retirement. A 30-year-old on the median wage is expected to have an extra $19,000 at retirement, a couple will have an extra $38,000.
In total, Australians will get an extra $1.5B paid in super in the next 12 months. Half of the extra super payments, about $784M, will go to those under 40 and more people in their 20s will get a super boost than any other age bracket. The super rate is legislated to rise from 9.5percent to 12percent by 2025 by annual 0.5percent increases.
The extra contributions will help young workers recoup the savings they lost after they were encouraged to access their super to support themselves through the Coronavirus downturn.
Industry Super Australia analysis of tax file data shows that more women than men will receive the July 1 super boost, 3.41 million women compared with 3.36 million men.
Around 63 percent of those who will benefit from the increase are on wages less than $70,000. Many of these 4.3 million workers are in line for a five-figure boost to their retirement saving, which will improve their quality of life at retirement dramatically.
“Even though the increases are only small now, they’ll add up to make a huge positive difference for millions of Australians when they retire,” Industry Super Australia Chief Executive Bernie Dean 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.”
