Victorian residents will see an increase in their retirement savings as the Superannuation Guarantee (SG) rate rises from 11 per cent to 11.5 per cent from July 1.
This automatic boost in super contributions will positively impact over 2.45 million people across the state, enhancing their financial security in retirement.
Due to this rate increase, the average Victorian worker will receive an additional $338 per year in employer-paid super contributions.
This change is part of a broader national effort to ensure Australians have sufficient savings to maintain a good quality of life in retirement.
The Superannuation Guarantee 0.5 per cent rise could deliver the typical 30-year-old $17,570 more at retirement, when combined with next year’s legislated rise to 12 per cent the typical 30-year-old could have $34,000 more at retirement.
Super members council chief executive Misha Schubert said the legislated Super Guarantee increases were key to delivering the quality of life at retirement that Australians deserved.
“Each of these increases might be small, but they are mighty – thanks to the power of compounding returns inside super over our working lives. This latest super boost will mean thousands more for millions of everyday Australians at retirement,” Ms Schubert said.
“In retirement, this money will fund extra basics – or perhaps a trip away, dinners out, the ability to spoil the grandkids, or even a bit more financial freedom and peace of mind.
“Our super system is the envy of the world because it lifts the retirement savings of Australians, takes the pressure off the taxpayer-funded pension, delivers investment capital to Australian companies and – most importantly – gives millions of Australians a better life at retirement.”
Ahead of the July 1 super rise date, the Super Members Council analysed large-scale de-identified tax and ABS data to reveal who would benefit the most from the increase. The analysis found that younger Australians and those on lower incomes will receive the greatest benefits.
Key Findings were as follows:
– Total Beneficiaries: 9.27 million people in Australia will get a super boost this year, split almost evenly between men (4.7 million) and women (4.5 million).
– Age Distribution: More than half of those receiving the increase are under 40, with people in their 30s receiving the highest boost to their retirement savings compared to other age brackets.
– Income Distribution: One-third of those receiving the increase earn less than $50,000 per year, and almost 60% earn less than $75,000 per year.
– State Comparison: The average West Australian will receive an extra $367 this year, the highest average super boost among the states.
– Occupational Impact: 2.1 million professionals and nearly 2.7 million tradies, machine operators, and laborers will also benefit from the increase.
The Super Guarantee is essential for funding the retirement of Australia’s aging population.
Before compulsory super was introduced in 1993, only 10% of retirees listed super as an income.
Now, about 90% of people aged between 30 and 50 have super, significantly reducing pressure on the taxpayer-funded age pension.
As more people retire with super, the reliance on the public pension system decreases.
The proportions of people on full and part pensions are already declining, with superannuation paying out more in benefits than the pension.
Despite the projected doubling of over-65s and the tripling of those over 85 by 2063, the Intergenerational Report shows that the age pension’s share of GDP will decline from 2.3% to 2% by 2062-63, even as other costs associated with an aging population rise.
