The Centre for International Finance and Regulation (CIFR) today released results of a study into superannuation knowledge, behaviour and attitudes among young adults in Australia. The CIFR-funded study surveyed nearly 1,000 superannuation fund members 25 – 34 years old and found that knowledge of basic facts about superannuation is low among this age group. The survey also found that young adults are largely unengaged by and uninterested in superannuation or retirement planning.
Professor Ian Ramsay of The University of Melbourne who led the study said, “Australia’s superannuation scheme is both a massive industry and an important instrument of modern social planning aimed at supporting and sustaining Australia’s increasingly aging and retiring population. Yet like the superannuation system itself, superannuation knowledge, behaviour and attitudes among Australians remain immature.”
He continued, “We chose to study this age group as they have joined the workforce relatively recently compared to older age groups, they are contributing to superannuation, and they are therefore forming views about the importance and value of superannuation – views that will influence their actions in relation to superannuation.”
The 994 respondents in the study completed a 75 question online survey instrument which collected information regarding their knowledge, behavior and attitude towards superannuation. The findings showed that knowledge of basic facts about superannuation is low, particularly in relation to age of access to superannuation and the definition of investment options. Stronger knowledge scores are seen in male, degree holding, urban and high income respondents.
Professor Ramsay said, “Studying commerce or finance related subjects at secondary school or university had the greatest impact in improving knowledge scores in respondents, which could present an argument for including financial literacy as part of the curriculum for secondary education.”
The study also found that the respondents do not check their accounts regularly or change investment options, and only one third read their periodic statements. A very small number planned for retirement.
“At the risk of overgeneralising respondent behaviour, young adults appear to be unengaged by and uninterested in their superannuation accounts or retirement. At the same time, their attitudes towards superannuation and retirement planning could best be described as worried and sceptical. Only one third consider themselves well informed about superannuation and most are not confident about retirement planning or prospects for retirement itself. These results indicate the need for more education and information about the benefits of superannuation, specifically tailored to this age group. Information could also be targeted at those groups the study identified as having lesser knowledge about superannuation, including those in regional areas.”
The study, “Superannuation knowledge, behaviour and attitudes in young adults in Australia”, was authored by Paul Ali, Malcolm Anderson, Martin Clark, Ian Ramsay, and Chander Shekhar from the University of Melbourne.
