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High fees are pushing Aussies to switch super funds

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Fees are eating into Australians' retirement savings, with 38% of workers saying they are too high, according to Your Super Future, a survey by ING Direct and the Financial Services Council.

Not surprisingly, high fees are the main reason, together with investment performance, for switching super funds.

About one in three people surveyed are aware that some funds offer zero-fee options, with 5% saying they pay no fees.

super fees

The annual fees for an average fund with an account balance of $50,000 are $640, according to AustralianSuper.

The fund charges annual fees of $373 for managing $50,000.

Around 56% of Australian workers feel "in control" of their super and 53% are able to make informed decisions about it.

While 89% say they check their super balance, 64% claim to know the actual amount in their super.

How much Australians believe they need to save in super for a comfortable retirement varies, with 46% estimating they need up to $500,000, while 39% say $1 million or more is the right amount.

Some 80% support an increase in super contributions to 12% over the next decade.

While people typically have confidence in the super system, 51% believe their fund savings will not provide enough income for a comfortable retirement.

Some 55% will use additional income sources such as property and employment to supplement their super in retirement, while one in nine say they will rely on an inheritance.

Most workers have a single super account, most often in an industry fund, with 68% saying it was selected because it was their employer's default scheme.

The most common reasons for having multiple super accounts are apathy - "not getting around to it" (43%) - and necessity - being "locked in" due to employer (18%) or fund requirements (18%).

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Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She's also author of the best-selling book Women and Money.
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