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Super literacy low for cash-strapped

Financial literacy around superannuation is poor for many lower-income people, who still question why they can’t access their funds until retirement age.


Understanding the purpose of superannuation is difficult for many consumers who do not understand access is restricted until retirement as they view it as their savings, a financial literacy body has found.

Ecstra Foundation chief executive Caroline Stewart said confusion about the nature of superannuation is common and is raised by school students who attend the organisation’s financial literacy classes, as well as adults seeking financial help.

“Students find it very difficult to get their head around the fact that it’s taken out of their pay and they don’t get it back until they are 65,” Stewart said during a media briefing in Sydney yesterday.

“We can talk about compounding savings, but even your average adult really isn’t paying much attention to that and they also can’t access their super.”

She added this lack of understanding was borne out during the COVID-19 pandemic when the government allowed access to up to $20,000 of superannuation.

“In the discussion during COVID around people accessing their superannuation early, a lot of community organisations we work with said it was a huge issue because people saw that as free money, and particularly for people in lower earning categories, especially women, that money was never going back,” she said.

“You lose the tax advantage once it’s taken out and people didn’t really understand that, but did it because they had short-term needs they needed to address and saw super as their money.

“We work with a lot of financial counselling organisations and community legal centres and this is the tension in teaching people financial literacy.

“People with lower access to funds are quite often great budgeters because they know where every cent goes, but there is no money left over.

“So teaching someone how to budget is one thing, but if they don’t have money to live on, superannuation is irrelevant to them.”



February 1, 2024
Jason Spits


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Tor Janes ABN 53 896 161 038 [t/a TJSfinancial] is an Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049, who holds an AFSL and Australian Credit Licence No. 236523.