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Super worried: 1 in 10 super customers switch to more conservative fund

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Some Australians are taking an extra cautious approach with their nest egg, according to new research by Finder.

A nationally representative survey of 722 Australians with superannuation revealed almost 1 in 5 (19%) have made changes to their risk profile in 2022.

1 in 10 members (11%) have switched to a more conservative risk profile in the past 6 months in a bid to safeguard themselves, while 8% have switched to a more aggressive risk profile.

Alison Banney, superannuation expert at Finder, said while the current market conditions can be worrisome, it's important to remember that super is a long-term plan.

"These downturns don't last forever – share markets have always recovered and gone up over the long term.

"If you switch your super to a more conservative option after the market has already fallen, not only are you locking in that loss, but you also risk missing out on the rebound when the market recovers."

As of 1 July 2022 the super guarantee rate increased from 10% p.a. to 10.5% p.a.

Banney said this meant employers were required to pay a bit more towards superannuation this year, which is good news for workers.

"These new super changes were introduced to help boost super balances.

"Now is a great time to compare your fund and make sure your super is working as hard as it can be."

Finder's research shows more than 1 in 4 gen Y super members (27%) have switched their super fund in the past 6 months – 17% chose a more conservative fund, while 9% switched to a more aggressive fund.

On the other hand, just 7% of baby boomers made a change to their risk profile.

Banney said the pandemic and recent share market turmoil has made members assess the risk/return profile of their fund.

"There's a strong correlation between global uncertainty and the amount of risk people are prepared to take with their investments.

"A lot of people are looking for less volatility due to macro-economic factors such as inflation and a looming recession.

"People don't want to take unnecessary risk when it comes to their retirement savings," Banney said.

The majority of Australians (81%) have not switched their super risk profile in the past 6 months.

In the past 6 months have you changed the risk profile of your super fund?
No, I have not switched my super fund in the past 6 months81%
Yes, I have switched to a more conservative fund (i.e. more cash, less shares)11%
Yes, I have switched to a more aggressive fund (i.e. less cash, more shares)8%
Source: Finder survey of 722 Australian super members, July 2022

Methodology

  • Finder's Consumer Sentiment Tracker is a monthly recurring nationally representative survey of more than 30,000 respondents.
  • The Consumer Sentiment Tracker is owned by Finder and operated by Qualtrics, an SAP company.
  • The survey has been running monthly since May 2019.

You can compare superannuation funds for free at Finder.

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