insight

Project Superpower: a strategy to engage people with their superannuation

Evidence type: Insight i

Context
The study
Key findings
Points to consider

Context
The study
Key findings
Points to consider
Full report

Context

Membership of a superannuation is mandatory in Australia. Fund value at retirement may be vital to quality of life in retirement. But consumers feel superannuation is complex and levels of engagement are often low. CHOICE, an Australian consumer advocate, wished to understand more about how consumers interact with their superannuation, what they know about it, what they are doing about it, and what would prompt them to take more action.

The study

The research was designed to help improve engagement and address specific issues among three target audiences – young adults, new mothers and pre-retirees. The key output was to identify and prioritise a range of strategies that might increase engagement within each target audience.

The research approach involved a literature review, in-depth qualitative interviews and a workshop with target groups, and the development and testing of 33 different ideas. The whole target group sample comprised:

10 young adults (five male, five female) aged 18-26, with a broad spread of employment, five engaged and five unengaged with superannuation, with single or dual income and no dependents;
10 new mothers aged 25-45, five with low/medium household income and five with medium/higher household income, four engaged and six unengaged with superannuation, three planning a career break, three on a career break and four recently returned to work part-time;
10 pre-retirees (five male and five female) aged 45-59, six with low/medium income households and four with medium/higher income, five engaged and five unengaged with superannuation, and four with dependents living at home.

The research was undertaken by Pollinate for CHOICE with funding from Financial Literacy Australia.

Key findings

Personal experience and understanding of money, the challenges of dealing with the system itself which is not user-friendly, and negative expectations of dealing with superannuation funds, create an environment in which people fail to engage with their superannuation;
Disengagement is connected with people’s deeply-held beliefs about money, which prompts them to prioritise immediate financial needs over future financial needs. Among the disengaged, simple lack of knowledge is the major barrier to doing anything;
Among pre-retirees, superannuation enters the realm of money worries and can cause feelings of guilt, shame, incompetence and avoidance. These in turn lead to feelings that it is too late to do anything;
Negative feelings, expectations and the experience of superannuation are often reinforced where funds have failed to establish any personal and trusted dialogue with members;
People want to make the right decision but they want it to be simple – they do not want to be educated;
There are common conclusions across all three groups researched:
- People may be less the problem than administrative and systemic flaws that make it difficult for people to engage;
- Superannuation needs to be made simple for people to develop ‘healthy habits’;
- A one size fits all branding approach that highlights a ‘blissful retirement’ will not work – communications need to be tailored to the needs of each audience.

Points to consider

Methodological limitations: This is a qualitative research study. Therefore it is not known how common these findings are across the wider population of Australia.
Relevance: In the market segments researched (young adults, new mothers and pre-retirees), findings are extremely relevant and provide good guidance and insights on the issues; other population segments may have different issues and levels of engagement.
Generalisability/transferability: The Australian Superannuation market is a very specific savings medium in a very specific environment. It is unlikely that the findings would be directly transferable to other retirement savings models elsewhere.
Applicability: The findings, while not directly applicable to other markets or other segments of the Australian Superannuation market, may point the way to approaches to address shortcomings in engagement/communications or understanding among other Australian Super savers.