A survey has revealed a ‘startling knowledge gap’ when it comes to superannuation in about half of Australian students, who know almost nothing about superannuation.
Student Super found that over 40 per cent of those surveyed weren’t sure how much superannuation they had in their member accounts, with over 65 per cent of students having a superannuation account.
Over 3,500 students were surveyed, with the new superannuation fund just for students, with $1.3 million in assets under management last year.
Typically students opt for whatever default fund is offered by their employer, particularly those under the age of 25. This means low fund balances across multiple super funds. Students often have multiple employers during these years, which ends up in more being paid in fees than should be if the student had just one super fund.
The survey found that almost half of all students don’t know what portion of their income is paid into superannuation, and another 30 per cent got that number wrong. Over half the students surveyed said they didn’t know if they could open a super fund before they got a job, nor did this percentage have any idea whether they had default life insurance.
Student Super launched in 2018, designed for students with part-time or casual work while they study. There are no fees charged on account balances under $1,000, and does not offer total and permanent disability insurance cover and there is no life insurance offered. This keeps fees low and fits in with the new rules regarding default insurance cover for young people.
Regular superannuation funds are set up for workers, not for job-hopping teens or 20-somethings, including jargon-free information and an app to change details and investment options.