Clients of AMP financial advisers are seeking out strategies to rebuild their superannuation balances as enquiries about COVID-19-related help start to ease, according to the latest figures from the technical adviser support team.
Data from the month of May[1] shows voluntary concessional and non-concessional super contributions were the most common topic dealt with by advisers compared with April, when advice on early access to superannuation was most in demand.
Calls about COVID-19 were still 9 per cent of all enquiries received in May, but this was well down from the 24 per cent in April.
AMP Technical Strategy Manager John Perri said the government’s super early release scheme was still providing critical assistance to thousands of Australians but it was clear that others who had the capacity to make additional super contributions were considering doing so ahead of the end of the financial year.
“Not everyone has the funds to contribute more to super at the moment, but it’s encouraging to see more Australians turning their minds to rebuilding their superannuation and retirement balances,” Mr Perri said.
“Recently introduced changes, such as the relaxation of the rules on concessional contributions, are encouraging people to make additional contributions where they can.”
Following changes to the rules in 2018, this is the first full financial year where individuals with total super balances under $500,000 (as at 30 June 2019) are permitted to use their unused concessional contribution allowance from the previous financial year.
“This means someone could potentially contribute as much as $50,000 this financial year,” Mr Perri said.
“The relaxation of the rules is especially helpful for those nearing retirement who haven’t been able to make contributions their full working life, such as women who’ve had interrupted careers, as they now may have a greater capacity to make ‘catch-up’ contributions at the concessional tax rate of 15 per cent.”
Mr Perri said there were additional changes yet to be passed by Parliament but due to take effect on 1 July 2020 that would also assist older working Australians looking to rebuild their super.
The new legislation enhances a measure recently introduced that increases the age up to which super contributions can be made without having to meet a work test from 65 to 67.
“This change recognises that many of us may have to work longer to have adequate savings for our retirement,” Mr Perri said. “Extending the work test age to 67 will allow more individuals aged 65 and 66 to top up their super without having to meet the work test, if they are financially capable of doing so. For some this is important after the impacts of COVID-19 on incomes and investments.”
Top client issues dealt with by advisers in May 2020
- Concessional Super Contributions
- Non-Concessional Super Contributions
- Dealing with a Death Benefit
- Concession Cards
- Early Release of Super
[1] Based on calls to TAPIN by advisers
