The ATO is continuing to urge young working Australians to consolidate their multiple superannuation accounts in order to avoid wasting thousands in unnecessary fees every year.
According to the ATO, 45 per cent of working Australians aged between 18 and 35 still have more than one super account.
ATO assistant commissioner of superannuation John Shepherd said young workers may not realise they are wasting thousands of dollars of their own money over time, with APRA figures showing the median fees and charges paid for a low-cost super account to be $532 per year.
Mr Shepherd said young people are often mobile in the workforce and it’s not uncommon for them to open a new account when they start a new job instead of taking their preferred fund account with them.
“They might also have super accounts of which they have lost track. For example, they may not have updated their contact details with their funds when they moved house – there are still $5.8 billion worth of accounts in this category,” he said.
Mr Shepherd said the ATO has, however, seen a significant increase in Australians merging their super into one preferred account, with more than 265,000 accounts with balances totalling $1.13 billion consolidated in the six months to December 2014.
“In one case, 17 accounts were consolidated,” he said.
“This is a rise of 400 per cent from the six months to December 2013 when 52,000 accounts worth more than $270 million were consolidated.”
Before consolidating, members should consider any insurance cover their accountants may hold since it will be cancelled once they close their account, Mr Shepherd warned.
“People should also make sure their super fund has their tax file number; they’ll pay less tax on their super and it will help us to make sure all their super accounts are displayed online,” he said.
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