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Superannuation drops as wealth component

The latest Roy Morgan research into the net wealth of Australian households has found superannuation and pensions/annuities are playing a smaller part in the make-up of people’s overall financial positions.

The “Superannuation and Wealth Management in Australia Report October 2017” showed superannuation and pensions/annuities now account for 27.4 per cent of household net wealth compared to 28.6 per cent in 2013.

In comparison, the role equity in owner-occupied homes played in household net wealth rose from 48.1 per cent to 53.1 per cent over the same period.

“Although superannuation funds have increased considerably over recent times, they have grown at a slower rate than the increase in home prices, leaving them holding a lower share than four years ago and currently just over a quarter of household net wealth,” Roy Morgan Research industry communications director Norman Morris said.

“This makes it very likely that for some years to come, retirement funding will need to come from household resources outside of superannuation.”

The study also found people living in owner-occupied homes held 85 per cent of the country’s total retirement savings pool, 89.7 per cent of all direct investments and 86.9 per cent of all bank deposits.

According to the report, the result means in all this group holds 94.4 per cent of total households’ net wealth when the equity in their own dwellings is taken into account.

Following on from this statistic, non-homeowners have been found to hold only 5.6 per cent of this total.

Morris pointed out the report emphasises the fact the financial well-being of all Australians is made up of a collection of interactive elements.

“This report highlights the fact that the topics of household debt, superannuation adequacy, home ownership, direct investments and savings all play a part in understanding the real financial position of Australian households,” he said.

“It examines the net wealth position of households, as it is ultimately this concept that will determine the financial well-being of households into the future, particularly their ability to cover financial needs for retirement, including coping with their level of debt.”

In regard to the overall net wealth of Australian households, the research revealed people in this country have improved their financial situations over the past four years, with net wealth levels increasing by 42.1 per cent from $5.7 trillion in 2013 to $8.1 trillion currently.

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