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Increase your superannuation by $200k with this one tip

Here's how to add an extra $200,000 to your super. Image: Getty
Here's how to add an extra $200,000 to your super. Image: Getty

Australia’s savers are losing $150 million in unnecessary fees every year to ‘Fat Cat Super Funds’ that aren’t performing as they should be, a new study reveals.

Around $7 billion is currently invested in 40 poorly-performing superannuation funds, and that means their members are losing $150 million in fees annually, the latest Fat Cat Super Fund report from investment platform Stockspot has found.

The average ‘Fat Cut Fund’ charges around 2 per cent in fees every year, compared to the 1 per cent charged by ‘Fit Cat Funds’.

‘Fit Cat Funds’ also return 20 per cent more over five years than their ‘Fat’ counterparts.

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“Superannuation is something that Australia should be proud of, yet these high fee ‘Fat Cat Funds’ continue to take advantage of thousands of Australians and their hard-earned money,” author of the report and Stockspot CEO, Chris Brycki said.

“One of our golden rules of superannuation is; the less you pay, the more you get. Always pay less than 1 per cent p.a. in fees so your super isn’t eroded by high fees,” he continued.

“I know 1 per cent doesn’t sound like a lot, but for the Aussies stuck in these ‘Fat Cat Funds’, they’ll be worse off by $200,000 or more compared to their friends who are in a low-fee fund.”

That means that by just switching from a high-fee charging fund to one that charges less than 1 per cent, Australian savers can save an extra $200,000 by retirement.

Stockspot arrived at that figure by using a 35-year-old man earning a salary of $78,192 with a super balance of $56,732 as an example, and comparing retirement outcomes for if he was with a fund charging 2.07 per cent in fees, and a fund charging 0.97 per cent.

What are the worst funds?

ANZ/OnePath and AMP make up more than half of all the worst ‘Fat Cat’ funds.

Image: Stockspot
Image: Stockspot

The average fee among the bottom

What are the best funds?

QSuper, UniSuper and Australian Super - which have 19 funds between them - all charge less than 1 per cent in fees annually.

Image: Stockspot
Image: Stockspot

I care the most about performance. Which funds perform well there?

These are the highest- and lowest-performing growth funds based on five-year returns.

Image: Stockspot
Image: Stockspot
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