The majority of self-employed people have little or no superannuation, research by the Association of Superannuation Funds of Australia (ASFA) has found.
The research found that most self-employed people – who account for around 10% of the workforce – will struggle to afford a comfortable retirement. The majority of the self-employed have lower super balances, across all age groups, compared to employees, with women at a “particular disadvantage”.
ASFA found that 19.1% of self-employed people have no superannuation, compared to 8% of employees.
26.3% of employees have what ASFA classifies as a ‘high’ superannuation balance – $100,000 and above – compared to 16.6% of self-employed. Though this conceals the gender difference, with 31.6% of male employees having a high balance compared to 20.7% of females. For the self-employed 18.2% of men have high balances, compared to 12.7% of women.
The self-employed approaching retirement have roughly only half of the super balances of the employed.
“The average super balance for self-employed men at age 60-64 is around $143,000, compared with $283,000 for male wage and salary earners. Self-employed women in that age cohort have only $83,000, compared with around $175,000 for female wage and salary earners,” said ASFA.
ASFA says a comfortable retirement requires a balance at retirement of $545,000 for individuals, or $640,000 for couples.
ASFA is calling for the Super Guarantee to be extended to the self-employed and to cover workers in the gig economy.
“This would lead to higher retirement incomes for workers and help boost the broader adequacy of the superannuation and retirement income system. ASFA believes all Australians should be included in compulsory savings arrangements, as well as being able to save voluntarily.”
ASFA didn’t elaborate on how it saw Super Guarantee for the self-employed operating, only saying: “ASFA is developing proposals to formally include the self-employed in the SG regime and also ensure SG coverage for gig workers.”
“To this end, ASFA will be talking to some of Australia’s major gig economy platform operators. ASFA will release a policy paper on the gig economy and superannuation in coming months.”