Accessing super funds to buy a home is a bad idea: AIST

by Julia Corderoy04 Aug 2014
Allowing first home buyers to access their superannuation funds for house deposits could lead to financial stress in retirement, warns The Australian Institute of Superannuation Trustees (AIST).

AIST CEO, Tom Garcia says the solution to housing affordability doesn’t come from our superannuation funds.

“[Superannuation] is a key plank of the nation’s retirement incomes policy and should never be used for any other purpose than helping people save for their retirement… Removing even relatively small amounts of savings from the superannuation system would see many more Australians reliant on the Age Pension and significantly worse off in retirement,” Garcia said.

Placing more reliance on the Aged Pension could be problematic, considering pensions formed a part of the budget cuts announced by the Abbott Government. The 2014-15 Budget will see pensions indexed to inflation from September 2017 – in a bid to make these payments more sustainable to meet the demand of Australia's ageing population. It is currently indexed in line with the higher of the increases in the CPI, Male Total Average Weekly Earnings or the Pensioner and Beneficiary Living Cost Index.

Superannuation is often not even enough as is, according to Garcia.

“Even when the superannuation contribution rate eventually reaches 12%, most young Australians will need every cent of their superannuation to achieve adequate levels of income in retirement," he said.


  • by Wozza 4/08/2014 10:00:24 AM

    One of the problems I foresee is drawing down super for a deposit, selling the home then using those funds for other purposes!

  • by MCC 4/08/2014 10:07:46 AM

    Definately an issue when looking at long term perspective & retirement , which Garcia is obviosuly concerned with. Notwithstanding the owner occupied family home (not Resi Investment) carries multiple usages & meaning which explores such areas as 'security, safety, memories, sense of belonging' etc etc. How do we measure those & weigh them against retirement savings?

  • by John 4/08/2014 10:12:43 AM

    "Please", Tom Garcia is looking after himself. I could be struck by lightning my super will be worth nothing to me.
    If I take out a deposit, at lease it will appreciate over the years and I will be able to enjoy it. How do I enjoy my super now? I believe it is a great idea, but in saying this there has to be some sort of agreement, that when the property is sold, those funds need to be returned to the super fund