Australians to See Bigger Super Balances Thanks to Rate Increase: What It Means for Your Retirement
Starting July 1, 2025, millions of Australian employees will enjoy a boost to their retirement savings as the superannuation guarantee climbs from 11.5% to 12%. This change marks the final step in a multi-year effort to strengthen Australians’ financial security in retirement, with the rate having steadily increased from 9% over the past few years.
What Does the Super Increase Mean for Workers?
While the jump to 12% may seem modest at first glance, it’s set to have a dramatic impact over time. For almost 10 million workers, more money will flow into their super funds automatically—no extra effort required. Under the updated rules, employers must contribute the higher percentage on all eligible earnings, meaning your retirement nest egg will grow faster, year after year.
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For the average Australian employee, this means an extra $317 in super contributions over the next financial year alone. Over a full career, the results can be remarkable: a 30-year-old today could see their super balance at retirement swell by $132,000 compared to what it would have been before the increases began. This figure includes the combined effect of all recent superannuation hikes, not just this year’s.
Young Australians to Benefit the Most
Younger workers stand to gain the most from the power of compounding returns. The Super Members Council estimates that someone aged 30 today will pocket an extra $22,000 at retirement just from the final bump to 12%. If you’re under 40, this change could add tens of thousands to your retirement savings over time, even if your annual income is below $50,000.
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The Association of Superannuation Funds of Australia (ASFA) projects that a 30-year-old with a median income and $30,000 in super today could retire with $610,000—well above the $595,000 currently recommended for a “comfortable” retirement as a single person.
More Reforms: Super on Parental Leave and Payday Payments
The July 2025 increase isn’t the only positive development for workers. From that date, anyone receiving government-paid parental leave will also receive superannuation contributions on top of their leave payments. This aims to narrow the super gap experienced by parents—especially mothers—who often take time off work to care for children.
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Looking further ahead, 2026 will usher in another key reform: “payday super.” Employers will need to pay super contributions at the same time they pay wages, making it simpler for employees to keep tabs on their super and reducing the risk of missing or late payments.
Retirement Costs Are Still on the Rise
Despite some relief in inflation, the cost of retirement continues to increase, particularly for essentials like groceries, power, and medical care. ASFA’s latest figures show a single retiree now needs $52,383 a year, while couples require $73,875 annually for a comfortable lifestyle. By age 67, that translates to a target super balance of around $595,000 for singles and $690,000 for couples.
A More Secure Future for Australians
Mary Delahunty, CEO of ASFA, described the 12% rate as a milestone for the super system, putting Australians in a stronger position to enjoy a secure, dignified retirement. Misha Schubert, CEO of the Super Members Council, echoed this sentiment, highlighting how the extra contributions give people greater freedom—whether that’s traveling, paying bills, or simply spending quality time with loved ones. The new super guarantee will help shield retirees from rising living costs, ensuring they can make the most of their golden years.