Australia: Rise in gig economy puts a damper on super balances

An increased desire for flexibility in recent years has led to a growing number of Australians working in the gig economy. Recent figures show the number of gig workers on various platforms has increased substantially in the last year alone, from around 100,000 to 150,000.

This rise in the number of gig workers and freelances, however, has profound consequences for the distant future when it comes time for these individuals to retire, as many choose not to pay into their superannuation.

Currently, there are no requirements for self-employed individuals, which gig workers are classified as, to make compulsory payments into a superannuation fund. In comparison, employed individuals receive a super contribution of 9.5 percent of their salary into a superannuation fund from their employers.

"This rise in the number of gig workers and freelances however has profound consequences for the distant future when it comes time for these individuals to retire, as many choose not to pay into their superannuation."

While a hundred dollars here or there in present days seems little to worry about, the compounded impact of CHANsuch will determine how comfortably these individuals will be able to retire.

Figures from the Association of Superannuation Funds of Australia (ASFA) show self-employed males have an average super balance of around $155,000 compared to that of $386,000 for male wage and salary earners. The difference is just as stark for females who already suffer lower superannuation balances than their male counterparts ($86,000 versus $159,000).

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