Early Release of Super (ERS) Update
/New research takes a closer look at what is driving Australians to withdraw their superannuation early. The ARC Centre of Excellence in Population Ageing Research (CEPAR) and industry super fund Cbs have identified urgent short-term needs for money are behind the early withdrawal of some or all of their superannuation savings in the Early Release of Scheme.
The research also shows that most of those who withdrew their super aren’t clear on what the long-term consequences of their decision are.
A team analysed over 3,000 Cbus members who withdrew superannuation savings in the first phase of the Early Release Scheme between April and June 2020. The $10,000 limit guided and constrained amounts withdrawn, with most taking out the maximum that they could. About a quarter took out almost all their super.
The main reasons given for taking the money out were immediate financial need (59 per cent) and concerns for future spending needs (27 per cent). About a third said they weren’t sure what impact their withdrawal would have on their retirement balances, hadn’t thought about it, or didn’t care.
About half those surveyed didn’t take into consideration or made an incorrect calculation, of the impact of their withdrawal on their at-retirement balance.
