Voice of Real Australia is a regular newsletter from ACM, which has journalists in every state and territory. Sign up here to get it by email, or here to forward it to a friend. Today's is written by ACM editorial trainee Ellie Mitchell.
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One of the most off-brand facts of my life is, for a period, I thought I was going to be a financial planner. There was a reason I switched to journalism (being bad at maths and my firm disposition as a spender, rather than a saver, among them).
But I've found myself looking back at my three years at the bank spent talking super with gratitude for the knowledge I gained.
Throughout 2020, we saw a surge in people joining the gig economy, driven by the pandemic's disruption to traditional work structures. It's a way of working where younger age groups, students and formerly unemployed are over-represented, and have no legal obligation to pay themselves super.
2020 was supposed to be my year. As a fresh graduate, I was hungry to join the workforce and sink my teeth into starting my career. Instead, I spent my time picking up what few freelance jobs I could, logging my hours and pay into Centrelink's youth allowance reporting system whenever an invoice came through.
Less than 1.5 per cent of gig economy workers make personal superannuation contributions. Like most, I simply couldn't afford to as an independent contractor.
Then, in April 2020, the Morrison government opened up the Early Super Release scheme, allowing a person to withdraw a total of $20,000 across two transactions from their super.
Research shows the median withdrawal was $10,000, and 25 to 34-year-olds were more likely to withdraw than any other age group.
We also know low-income earners and people with low financial literacy were more likely made a withdrawal.
If the average growth fund returns 7.9 per cent every year, $10,000 in a 25 year old's super fund alone would reach $209,343 by the time they reach 65-years-old. $20,000 would equal $418,685.
How many young Australians have been robbed of these critical savings by bad policy that counted on lack of super understanding?
Had it not been for my banking-era, I would have been among them.
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