Super fees can be very confusing!

Most Australians don’t know what their super fund charges. 

Vanguard Australia has just released the findings from their May 2024 survey of 1,772 participants - a representative mix of ages, sexes, incomes, and suburbs.

The results are sobering - checking out your fee payments is a MUST-DO, as paying high fees can significantly impact your retirement savings.

What You Should Know and Do 

• Multiple fees: 61% of Australians are unaware that their super funds charge multiple fees. It may be time for you to check your super fund and understand what you’re actually paying.

• Women: 50% of women do not know how much they’re paying in super fees, and only 24% feel confident explaining these fees compared to 41% of men. If that’s you, seek out resources to boost your financial knowledge.

• The Impact on of fees on Retirement Savings: If you’re in a high-cost super fund, which can cost you around 12% of your retirement savings, which can add up to approximately $100,000 less by the time you retire. 

• Common Misconceptions about fees: Many Australians mistakenly believe they only pay administration fees (74%) or insurance premiums (40%). However, there can be up to six different types of fees, including investment and transaction fees. You should get to know about all of the fees you’re up for. 

• Switching Super Funds: After learning about potential long-term savings, 72% of survey participants indicated they would consider switching to a lower-fee fund. This might be a good opportunity to explore your options.

• The ATO has a free super comparison tool: Just 19% of Australians know about the ATO’s Your Super comparison tool, which helps you compare fees across different funds. You can check out the ATO tool to find out how your current fund measures up, for starters.  Please note this comparator only provides data for MySuper funds * 

Look after your financial health!
It’s so important to be clear on the fees you’re paying, and to be proactive with your super choices/

*What is MySuper? MySuper is a type of account that employers can pay super into on your behalf if you have not chosen a super fund, and don’t have a stapled super fund. That’s an existing super account linked, or 'stapled', to an individual employee so it follows them as they change jobs. MySuper accounts typically offer lower fees, simple features – so you only pay for services you need, and either a 'single diversified' or a 'lifestyle' investment option.

MySuper does not apply to defined benefit funds.

Next steps:

If you have questions about your superannuation fund, or are uncertain about the fees you’re paying to that fund, call us for a quick chat or drop us a line.

References: 
Vanguard Investments Australia: https://www.vanguard.com.au/corporate/media-centre/2024/greater-transparency-needed-on-super-fund-fees
Australian Tax Office: https://www.ato.gov.au/single-page-applications/yoursuper-comparison-tool

* CSIRO Commonwealth Scientific and Industrial Research Organisation is Australia’s national science agency https://www.csiro.au/en/
** Firming at scale means maintaining the output from an intermittent power source for a required length of time – in other words, making sure enough energy is always available.

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