Today’s financial lockdown pain will fuel tomorrow’s retirement despair further for self-employed people

Martin Batur, Peter Stanhope, and Branka Injac Misic founded GigSuper on the simple idea that you shouldn’t need to be a finance expert to sort out your super when you’re self-employed.
GigSuper co-founders: Martin Batur, Branka Injac Misic and Peter Stanhope

With more than half of Australians in lockdown, many are facing continued financial hardship which will however, most likely continue into retirement for many self-employed people.

report by the Association of Superannuation Funds of Australia shows that self-employed Aussies are already expected to retire with 50% less super on average than employees.

Self-employed women are predicted to retire with 70% less compared to employed men, and 20% of all self-employed Australians retiring with no superannuation at all.

GigSuper optimistic about self employment growth

These statistics frighten the retirement outcomes of the self-employed. However, there are signals of a sharp rise in the number of people becoming self-employed in the pandemic.

The Australian Bureau of Statistics stated in 2019, that around 2.2 million people, or 17% of workers, were self-employed in their main job.

This substantially increased due to the COVID-19 pandemic as, according to ASIC, June 2021 had the highest number of business registrations than at any other point in two decades.

More than ever before, individuals and families will be in need of advice to assist them in putting money away for their retirement in hopes to close the growing retirement divide.

The superannuation industry remains almost entirely focused on forced super contributions, ignoring a whole category – the self-employed superannuation category (not to be confused with self managed super) – which now desperately needs more attention.

The self-employed are being left out of the superannuation conversation, with no real push for education that could guide them through the complexity of the superannuation system.

Especially in these trying times when it has become very apparent how important it is to have your own financial backup for when you can no longer work.

Some argue that the superannuation system is geared towards employees and self-employed people would be happy to have a choice not to contribute to their retirement savings.

But in reality, this simply isn’t the case as members of GigSuper – a super fund specially designed for self-employed people – have shown time and time again.

This cohort desperately wanted to contribute to their super, but they were completely overwhelmed by the system and didn’t know how to make it work in their favour.

GigSuper simplifies the superannuation process

While self-employed Australians continue to increase, many will continue to fall prey to the idea that super has a massive veil of complexity and that it’s just not worth their effort.

GigSuper comes in with purpose-built technology, automation and human language that empowers self-employed people to get back on track with saving for retirement again.

“Why has it taken this long to have a friendly and personable super fund?” says Ami Williamson, an e-commerce copywriting specialist and GigSuper member.

“The platform is easy to use. The signup process is simple, and built for self-employed folks, but it’s the approachable feel of the GigSuper team that makes the biggest difference!”

GigSuper members are 3 times more likely to make contributions with GigSuper than with other funds (89% made a contribution to super in the last 12 months compared to 25% with other funds as estimated by Treasury’s Retirement Income Review 2020).

73% of GigSuper members have been continuously saving since joining and 83% of members are claiming their contributions as a tax deduction (compared to an average of 10% with other funds as estimated by Treasury’s Retirement Income Review 2020).

These statistics are a clear indication of how self-employed people need help to start to break down those retirement savings barriers in order to begin to close the large retirement gap that exists between them and their employee counterparts.

It’s time to bring the 2.2 million self-employed Australians into the superannuation conversation and give them the tools they need to safeguard and rebuild (if they dipped into their super early) what’s likely to be their biggest asset in retirement.

The self-employed community already has a lot on their plate, from figuring out GST and tax, to navigating the continuous business stresses of lockdowns – superannuation should be a hurdle they can overcome with a bit of helpful guidance from an ever-evolving industry.