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Time of India
a day ago
- Business
- Time of India
The $100-a-week super habit that could save Aussie business owners from a $500,000 retirement shock
A retirement crisis may be brewing under Australia's economic radar, and it's not among the unemployed, but among the self-employed. A new survey commissioned by AMP Bank has found that close to half of Australia's smallest business owners, including sole traders and micro-businesses, are not regularly contributing to their superannuation, potentially setting themselves up for financial insecurity in retirement. In a national poll of 2,000 small business operators, 55 per cent reported that they make regular super contributions, meaning that 45 per cent do not. That's a significant shortfall, especially considering that most salaried workers in Australia benefit from the mandatory Superannuation Guarantee, now set at 12 per cent. Also Read: Chinese threat or American pressure? What really fueled Australia's 1.3 billion missile purchase But super contributions remain optional for the country's 2.2 million self-employed workers, including tradespeople, creatives, consultants, and other gig economy participants. Live Events And many are choosing to forgo them, often to keep their businesses afloat. 'It's understandable that many small business owners prioritise reinvesting in their business, which can mean super contributions fall by the wayside', said John Arnott, Director at AMP Bank GO on X. The long-term cost of short-term focus The financial trade-off might seem minor in the short run, but the long-term implications are staggering. AMP Bank's modelling shows that contributing just $100 a week to super starting at age 30, assuming a 6 per cent return, could yield over $500,000 by retirement at age 65. That means skipping those small contributions now could result in a half-million-dollar shortfall later in life, a costly oversight for anyone banking on a comfortable retirement. Also Read: Why Australia is taking only 280 people a year from Tuvalu, even as one third want to flee Who's falling behind? The research revealed apparent disparities across industries and regions. Solopreneurs and businesses with four or fewer employees were among the least likely to contribute to super, with just 50–55 per cent making regular payments. Owners of younger firms (1–3 years old) and those located in rural areas were also among the least engaged with super savings. Meanwhile, small business owners in financial services showed the highest contribution rates (71 per cent ), while those in creative fields, already prone to income instability, had the lowest, at just 46 per cent. A system not built for freelancers and sole traders? The issue isn't just financial, it's also structural. Australia's superannuation system was designed mainly with full-time employees in mind, not the growing population of freelancers and sole traders. Flexibility may be a feature of self-employment, but it's also a flaw in this case. Unlike employees, the self-employed don't have an employer automatically paying super on their behalf. And unless they make a conscious effort to pay themselves, and their future, first, they may reach retirement with little or nothing saved. Also Read: Mysterious interstellar object enters solar system; the largest, fastest, and only the third ever recorded What can small business owners do now? Arnott urged small business owners to balance short-term survival and long-term planning. 'Even small, regular contributions can have a massive impact thanks to the power of compounding,' he said. He also recommended practical strategies for boosting super savings. These include setting up automatic contributions through your banking app or accounting software, making lump sum contributions during periods of healthy cash flow, using government incentives such as co-contributions or tax deductions, and seeking support from your super fund, accountant, or other small business owners.
Yahoo
10-02-2025
- Business
- Yahoo
Aussie bank delivers huge card makeover
AMP Bank is introducing numberless debit cards for its small business and personal banking customers in a radical makeover designed to combat fraud and scams. The retail bank partnered with US payments giant Mastercard to deliver the striking new-look cards, which don't present any front-facing numbers like standard issue bank cards. The back of the card presents a four-digit number. The bank claims by removing visible card numbers, small businesses will be 'less susceptible' to fraud and scams. The cards are linked to the bank's push for a new app-only service, meaning only customers operating through AMP's mobile app-based bank can access the cards. AMP, unlike Commonwealth Bank or NAB, does not host any brick-and-mortar branches, and operates as a 'digital bank'. Customers would access their 16-digit number online through the app, the bank said. The app will include other security features such as advanced fraud and scam protection systems to protect customers and multimodal biometric authentication, the bank said. Customers will be encouraged to use face ID and fingerprint ID to enter the app and then to record a video selfie when they first sign up to prevent identity theft. Mastercard Australasia division president Richard Wormald said the numberless cards represented a 'significant step forward in payment security'. 'Numberless cards represent a significant step forward in payment security, offering cardholders additional protection against fraud and account compromise,' he said. 'Mastercard is proud to partner with AMP Bank to deliver these new safeguards to Australian entrepreneurs, empowering them to spend less time worrying about fraud and scams, and more time focusing on what they do best.' The bank, part of ASX-listed AMP Limited, boasts more than one million customers across Australia and New Zealand. Sean O'Malley, AMP Bank Group Executive Sean O'Malley said the innovation would be 'one of many firsts' for the digital first bank. 'We all know that banks simply have to do a better job of supporting the millions of small businesses operating across Australia,' he said. 'That's why we've developed a new mobile banking platform with leading tech that is proven to make it easier and safer for business owners to operate and administer their businesses. 'Mastercard's numberless bank cards are one of many firsts for micro and small businesses that we expect to deliver with the digital-first AMP Bank.'
