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The big cost of multiple super accounts


Published 1 August 2016

You could be paying three people for the one job of managing your super, writes Neal Vaughan.

What if there was one simple step you could take now to add 20 per cent more to your retirement savings? And the sooner you take action, the bigger the benefit?

The answer is to stop paying multiple fees, which many of us are doing by owning more than one superannuation account. There may be some reasons to stick with multiple super accounts, such as not paying exit fees to close them – but paying multiple fees can eclipse such benefits.

Superannuation fees cost Australians more than $20 billion a year, according to the Grattan Institute – a figure that could be slashed if everyone consolidated their super as the Australian Taxation Office urges us to.

ATO figures show about 40 per cent of Australians hold more than one super account, meaning many of us are paying multiple sets of fees which eat into our retirement savings year on year.

While everyone's situation is different, the Grattan Institute study, Super sting: how to stop Australians paying too much for superannuation, outlines broad potential for big savings by account holders.

The study estimates the average 30-year-old today will potentially have $1 million in super if they retire at age 70, based on current average contributions and inflation expectations. But if the same 30-year-old pays fees of 1.5 per cent each year, they could lose up to $300,000 out of that potential $1 million, as those fees eat up their investment gains.

The same study shows that a 0.5 per cent reduction in those fees (from 1.5 per cent to 1 per cent a year) would cut those losses by $90,000.
 

 

The Australian Securities and Investments Commission’s MoneySmart website reports how a 1 per cent difference in fees now could become a 20 per cent difference in savings in 30 years. It’s easy to see that a little change now can make a big difference to your retirement.

And the easiest way to do this is to consolidate the number of super accounts you have.

Before deciding to consolidate your accounts, it’s important to consider factors such as changes to your investment mix, the level of insurance held and whether there are any exit fees.

ANZ Smart Choice Super’s online round-up service is simple:

Go to ANZ Internet Banking > Apply > Superannuation > Find your super > Transfer

ATO’s online consolidation:

  1. Create a myGov account and then link the ATO to your account.
  2. Go to the 'Super' tab.
  3. Choose the fund you want to transfer your money from (‘Transferring fund’) and the one you want to transfer it to (‘Receiving’).
  4. Confirm your selection.

If you’re not set up in ANZ Internet Banking, please call us on 13 12 87.

Talk to us about superannuation

13 12 87

Mon-Fri 8am to 7pm (AEST) 

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