Young Adults Can Get Set For Life

Modest savings from part-time work have plenty of time to grow

- Vita Palestrant

Many young adults juggle part-time work with different employers while studying, eventually landing up with several inactive default super accounts. The fees in each eat away at the small amounts of money sitting there.

But there’s good news on this front and it will hopefully encourage young adults to focus more enthusiastically on their savings and monitor how their fund is performing.

Last year the federal government introduced a package of reforms entitled Protecting Your Super. Accounts under $6000 that are inactive for over 16 months will be transferred to the tax office for consolidation with the member’s active account; fees on small accounts are now capped at 3% a year; and exit fees, which acted as a disincentive to consolidate, are banned.

And from April 1 this year, life insurance will no longer be automatically given to members under 25. If they want the cover, they will have to opt in, rather than the other way around. Often young members without dependents can do without the insurance – and the premiums.