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Changing super rules turns young people away
Uncertainty over superannuation taxation and access is forcing young people to put their money outside super, an accounting and advisory firm claims.
William Buck believes more than 10 years of debate on superannuation regulation has meant young people know the rules that are in place for their money today will change tomorrow.
"Government policy changes and media debates have led to a reluctance to put extra money beyond the mandatory 9.25 per cent into superannuation," head of the wealth advisory focus group at William Buck, Chris Kennedy said.
"The incentives, such as salary sacrifice limits, have fallen significantly in recent years."
The significant asset base in super funds now creates income that is taxed as low as 0 per cent for those funds paying a pension, and Kennedy believes this is not sustainable.
"Young people quite rightly feel that with the ageing population, the Government may need to gain a greater stream of income from the fund and that's creating a long-term fear," he said.
People needed to know that having money in super was a smarter move tax-wise than allotting money outside super.
"Whether that's possible when such a large asset pool sits at the mercy of the Government's changing agenda, remains to be seen," Kennedy said.
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