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.

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Provider

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*Rate varies on savings amount
  • Deposit $500 per month to get bonus interest
  • 5.50% p.a. available on total savings up to $100k.
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  • Tiered bonus rates apply. (TMDs at ubank.com.au)
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  • For deposit amounts $0 - $49,999
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  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
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Savings Maximiser (<$100k)

  • Deposit at least $1,000+ each month from an external source
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Goal Saver

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    Young Saver Account

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      Smart Saver Account (Under 25)

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        Reward Saver Account($0-$100k)

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          Save up

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            Bonus Saver (<$1 Million)

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              ANZ Save

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                Bonus Saver Account (Amounts < $100k)

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                  NetBank Saver

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                    Life (< 30 years) (Monthly deposit)

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                      Boost Saver

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                        HomeME Savings Account ($0 - $100,000)

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                          Growth Saver ($1 - $25k)

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                            For customers aged 14-35 years
                            For customers aged 14-35 years

                            Future Saver Account ( < $50k)

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                              Reward Saver Kick Start (Amounts ≤ $1m)

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                                Saver Account (<$250k)

                                  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 July 19, 2024. View disclaimer.

                                  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