Super funds for low-income earners

Finding a super fund that offers you good value and healthy returns are important for everyone, perhaps especially if you’re on a low income and want to save for your retirement.

There are a number of government tax initiatives to help low and middle-income earners, which you can use to pay extra money into your super. But it’s also important to make sure you are in the right fund for your circumstances.

If you work for an employer then you may already be a member of a super fund. This could either be the one your employer recommended or one you nominated. If you meet certain requirements, your employer will be making regular contributions to that super fund based on a percentage of what you earn.

If you are self-employed then there is no requirement to set up a super account for yourself. But you might want to consider doing so as there are tax concessions you can get on any contributions you make.

In either case you need to consider whether the super fund you are already in meets your needs for the future. If it doesn’t, then you can consider switching to another fund that does.

What to look for in a super fund

There are two main things you need to look at if you’re a low-income earner looking to join a super fund: how much does it charge in fees and how well does it perform.

Low fees

A super fund with low fees could help you maximise the amount of money you’ll have come retirement. High fees could potentially eat away at your super balance and make building for a comfortable retirement that bit harder.

Super funds typically charge a range of fees on a regular basis.

These can include administration fees, investment fees (also referred to as management expense ratios or MERs), potentially a performance fee depending on how well your fund performs for the financial year, and other fees such as for switching your investment options.

If you have income protection, life or total and permanent disability (TPD) insurance through your fund, you may pay a small regular premium for these as well.

Check the Product Disclosure Statement (PDS) of any super fund you’re considering to see if it charges any other kinds of fees that could potentially eat away at your balance over time.

It’s also worth checking your super statement to see what your current fund is charging you in fees. If you’re not sure what the figures mean on your statement then call your super provider and ask them to explain.

Strong performance

A fund with strong investment performance throughout your working life will also help your super grow, but not all funds perform the same.

The Australian Prudential Regulation Authority (APRA) is naming and shaming those super products it thinks are underperforming, so it’s worth checking that your super is not with one of those mentioned. If it is, you should receive a letter from your super provider explaining what options are available to you, including switching to another fund.

Performance is usually given as a percentage which shows how much the fund delivers in investment returns each year. Even a fraction of a percentage point difference in performance can have an impact on how much super you will have available when you decide to retire. It could even be the difference between a modest or a comfortable retirement.

But remember, the performance numbers you see only measure how a fund has performed in the past. Strong past performance does not necessarily indicate a fund will perform well in the future, so you need to consider how that performance has varied over time and could vary in the future.

You can take a look at the top-performing super funds on Canstar’s database over the past one, three, and seven years.

How can low-income earners boost their super balance?

If you’re worried about not having enough super in retirement, there are a few things you can do that could potentially increase the rate at which your super grows year-on-year.

If you can afford to, ask your employer to use part of your pre-tax pay to make an occasional or regular contribution into your super fund, on top of the mandatory contributions your employer makes. This is known as salary sacrificing or salary packaging, and the extra money paid into your fund is taxed at a low rate of just 15%, provided you don’t exceed your concessional contributions cap.

If you’re self-employed, Moneysmart notes that any concessional (pre-tax) contributions you make to your super are tax-deductible.

Check with the Australian Taxation Office (ATO) to see if you’re eligible for any government contributions to your super, such as the low income super tax offset or a super co-contribution. If you supplied your Tax File Number to your super provider then these government contributions should apply automatically if you’re eligible, but it’s always useful to double-check.

If you’re in a relationship (married or de facto) and your partner earns more than you, they could consider making contributions to your super.

If you’ve ever changed employers you may have more than one super fund in your name. It’s easy to check if you have any other accounts. If you do, see if you can consolidate those funds into one to save on paying duplicate fees. But before doing so, make sure you check to see if you aren’t losing out on other features, such as insurance, from any funds you are about to leave.

Some of these options may have tax implications for you, so consider contacting the ATO or seeking professional tax advice if you would like more information.


To summarise, choosing a super fund is a personal decision, but regardless of your income it could be worth considering factors like fees and performance if you want to grow your balance as much as possible during your career. Canstar’s Superannuation Star Ratings and Awards assess super funds based on these and other factors, across a range of age groups and super account balance levels.

Some of the top-rated super products for low balances

If you’re comparing superannuation funds, the comparison table below displays some of the products currently available on Canstar’s database for Australians aged 30-39 with a balance of up to $55,000, sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Use Canstar’s superannuation comparison selector to view a wider range of super funds.


Cover image source: kram-9/

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