As many as four in 10 Australians who withdrew from their superannuation under the Federal Governments early super access scheme saw no drop in their income during COVID-19. 

Over a quarter (21%) who accessed their super early experienced a pay rise of more than 10%. 

Analytics firm AlphaBeta, part of Accenture, and credit bureau illion analysed depersonalised banking data from more than 10,000 Australians who withdrew superannuation during round two of the scheme.

Recipients spent an extra $3,618 in the first fortnight after receiving the lump sum, compared with what their average spending was in a normal fortnight before the early super withdrawal scheme.

Need somewhere to store cash and earn interest? The table below features introductory savings accounts with some of the highest interest rates on the market.

Provider

4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
Disclosure

Macquarie Savings Account (<$250k)

  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
Disclosure
400$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
Disclosure

Savings Accelerator

  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
Disclosure
000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Set up your Pay Cycle and connect your accounts from over 140 financial institutions.
  • Retrace your spending steps into categories with Spending Footprint.
  • Start tapping straightaway with Apple Pay, Google Pay™, Samsung Pay, and Garmin Pay.
  • No monthly or international fees on any of your transactions.
Disclosure

Save Account

  • Set up your Pay Cycle and connect your accounts from over 140 financial institutions.
  • Retrace your spending steps into categories with Spending Footprint.
  • Start tapping straightaway with Apple Pay, Google Pay™, Samsung Pay, and Garmin Pay.
  • No monthly or international fees on any of your transactions.
Disclosure
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
Disclosure

Savings Maximiser

  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
Disclosure
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Earn up to 5.20% pa by depositing $1,000 in the previous month
  • No account fees
  • Easy access to your money
Disclosure

AMP Saver Account

  • Earn up to 5.20% pa by depositing $1,000 in the previous month
  • No account fees
  • Easy access to your money
Disclosure
020000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

HomeME Savings Account (<$100k)

    02001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

    Growth Saver

      01000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

      Virgin Money Boost Saver

        01001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

        Bonus Saver Account

          01000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

          Bonus Saver

            0100$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

            mySaver

              000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

              Simple Saver

                4001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                Netsave Account

                  3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                  Online Savings Account

                    3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                    HSBC Everyday Savings Account

                      0501$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                      Incentive Saver Account

                        4000.01$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                        Bankwest Easy Saver

                          0502$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                          Bonus Saver

                            0500$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                            Incentive Saver Account

                              02000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                              Growth Saver Account

                                Important Information and Comparison Rate Warning

                                All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of October 14, 2024. View disclaimer.

                                Important Information and Comparison Rate Warning

                                On average, Australians withdrew around $7,495 of the $10,000 limit. 

                                The analysis found that as with the first round of the early super withdrawal, Australians have used this money to increase their spending rather than maintain it. 

                                Almost two-thirds (64%) of this additional spending was on discretionary items such as clothing, furniture, restaurants and alcohol.

                                Meanwhile, spending on debt repayments has dropped slightly since the first round of early super withdrawal, from 14% to 12%. 

                                second-round-of-super-withdrawals.jpg

                                Dr Andrew Charlton, Director of AlphaBeta said the findings were concerning. 

                                “This second tranche of super withdrawal and spending follows the same trend as the first round – but at greater levels of spending,”  Dr Charlton said

                                “While this policy was aimed as a lifeline, more than half the people that withdrew the second amount had no change in income. In fact, almost a quarter had increased their income and still continued to withdraw from their retirement savings.

                                “These short-term decisions will have a major impact on the retirement incomes of those who withdrew their super."

                                screenshot-2020-08-17.jpg

                                By gender, the average super withdrawal in the second round was $7,240 for women and $7,750 for men.

                                The analysis also found that men and women spent their lump sum in different ways. Women said they spent almost 30% on essential goods and services, while men spent 22% on essentials.

                                Men are still leading with gambling spend, with 10% of their super money spent on gambling, compared with 6% for women.

                                Women spent 15% of their super money on debt repayments (this includes buy now pay later debts), while men spent 12%. 

                                To be eligible for early release of super, you must be unemployed, have been made redundant, or had your working hours reduced by at least 20% since January 1.

                                spending-categories.jpg

                                But the study found that many people who accessed the scheme saw no drop in their income while others even had a pay rise, raising questions about whether those accessing the money really needed it. 

                                Simon Bligh, chief executive of illion warned the impacts of early super withdrawal could be felt years down the road.

                                "A double withdrawal by mum and dad now potentially means that a chunk of their retirement saving has been spent," Mr Bligh said.

                                “The financial impacts of COVID-19 will be with us for a very long time."

                                The scheme, introduced in March, has allowed people experiencing financial hardship as a result of COVID-19 to withdraw a total of $20,000 tax-free from superannuation ($10,000 in two separate stages).

                                The Australian Taxation Office (ATO) has warned that those misusing the scheme could face fines of up to $12,000 and pay tax on the amount withdrawn.

                                recepient-of-second-round-super-withdrawals.jpg