Money Australia - August 2019

IN BRIEF

Price comparison

tackles insurance

‘loyalty tax’

F

romJuly1, 2019,insurersarerequired

toincludethepriceoftheirprevious

year’spolicyalongsidethenewprice for all

homeinsurancerenewalsin NSW.

Therequirementis expectedtohelp con-

sumerssave,especiallythosewho shop

aroundorquestioninsurerstobeat what’s

beenlabelleda “loyaltytax”.

AllanFels,theNSWemergencyservices

levyinsurancemonitor,saysthiscompari-

sonhasnotpreviouslybeeneasily available

toconsumers.“Peopleshouldbeable to

seeanypriceincreaseseasily,particularly

giventhepracticebysomeinsurers of

charginghigherpremiumsforrenewing

customersthanfornewones.”

Lastyearhepublisheda studythat

showedNSWconsumerswhorenew a

homeandcontentspolicywiththeir exist-

inginsurerpay,onaverage,27%more than

newpolicyholders.Thistranslatesto hun-

dredsofdollarsfortheaveragepolicy.

“This‘loyaltytax’occurswheredis-

countsareofferedtoattractnewcustom-

ers,butpremiumsarethenraisedatfuture

renewals.Manypeoplewouldregardthis

asunfair,”saysFels.

Allhomeandmotorinsurancerenewals

mustalsoshowthecomponentsofthe

premium,includingtheemergencyservic-

eslevy(ESL).

Felsis monitoringNSWpricestoensure

insurersdonottakeadvantageofchanges

in theESLbychargingexcessivepremiums.

Hesayswhilethenoticetodisclosethe

previousyear’spriceis mandatoryin NSW,

heunderstandsthatsomeinsurerswill

implementit nationally.

In 2015-16and2016-17,theNSWESL

insurancemonitoridentifiedmorethan

$1.6millionin over-collections.

MORE

MONEY

STORIES

ON P46 -

MY

MONEY

Super benefits

most retirees

S

uperannuation is by and

large delivering its purpose,

even though it does leave a

minority of people behind, lat-

est Challenger research shows.

Super is reducing reliance

on the age pension for most

Australians entering retirement

and Challenger’s research

says the average newly retired

Australian is not accessing the

age pension at all.

Examining data from the

Department of Social Servic-

es, Challenger says 45% of

66-year-olds were accessing

the age pension at December

2018 and 25% of them were

drawing a full age pension.

But this doesn’t mean super

is working perfectly.

“What you retire with is

very closely linked to what

you put in. For this reason,

there are some segments of

the population, particularly

those not in stable, full-time

employment, for whom the

system produces poorer

outcomes,” says the research.

The average consolidated

super balance for a person

aged 60-64 is now more than

$300,000. Within this cohort,

the average male balance is

$336,000 and the average

female balance is $278,000.

At June 2017, the average

consolidated account balance

across the entire super system

was $128,000.

Challenger says higher levels

of super savings will result in

some Australians receiving only

a part age pension. It will also

leave others without access

toanyformofsecure,lifetime

incomein retirement.

Morethan$800billion

currently sits in the accounts

of fund members aged over

65, representing more than

28% of total assets in the

superannuation system.

COMPILED BY DARREN SNYDER

of 80-year-oldsgetsome

agepension

in super at the start of

retirement today

80% $400k

PROGRESS REPORT

More than A typical couple

would have over