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