Data analysis performed by the AMP technical adviser support team has found queries regarding strategies to build superannuation balances have now usurped demand for COVID-19 relief advice among the financial services firm’s clients.
The figures showed that in May the majority of queries AMP advisers fielded from their clients were about making voluntary concessional contributions and voluntary non-concessional contributions before the end of the current financial year.
Significantly, the data also revealed the proportion of all calls AMP advisers received concerning the coronavirus fell from 24 per cent in April to 9 per cent in May.
“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,” AMP technical strategy manager John Perri said.
Perri noted the increase in contribution strategies has coincided with the first opportunity for Australians with a superannuation balance of under $500,000 to take advantage of any unused concessional contributions caps from the previous financial year.
“This means someone could potentially contribute as much as $50,000 this financial year,” he said.
He identified certain individuals to whom these new rules would be particularly advantageous.
“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,” he noted.
Further, he acknowledged retirees could soon receive another opportunity to boost their retirement savings resulting from an impending legislative change that will allow individuals aged 65 and 66 to make superannuation contributions without having to satisfy the work test.
“This change recognises that many of us may have to work longer to have adequate savings for our retirement,” he 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.”