Accessing super now will cost later

While measures under the federal government's coronavirus economic support packages allow qualifying individuals suffering financial hardship to access up to $10,000 of their super in 2019-20, and a further $10,000 in 2020-21, consumer and advocacy groups have urged caution.

Super Consumers Australia has especially warned younger people about the implications of any early super withdrawals.

Its modelling found that, for a 30-year-old, the impact of withdrawing $20,000 would be $49,823 by retirement age ($31,181 for someone aged 50 and $23,770 for a person aged 60).

"Taking out money before retirement means losing the benefit of compound interest over a lifetime," said Super Consumers Australia director Xavier O'Halloran.

"There are a number of financial assistance options to help people through these tough times.

"Super will be the right option for some, but you should be looking at what else is available and possible cuts to discretionary spending before raiding the cookie jar."

Council on the Ageing chief executive Ian Yates said his message to people was simple: "If at all possible, if your savings are in super, keep them in super.

"Even if you move your money into a more conservative option within your super fund, you can move it back into a growth fund later. But if you move it out of super, you may not be able to put it back in again."

Mr Yates said one of the tragedies of the GFC was that people "crystallised" their losses by taking their diminished funds out of super accounts.

"Then they had no way of growing them back and at the same time they lost the multiple tax advantages you get from having your savings in a superannuation account."

Consumer advocacy group CHOICE has warned that accessing your super should be a last resort.

"If people are in financial difficulty, we encourage them to contact financial counsellors, not financial advisers," said CHOICE policy and campaigns adviser Patrick Veyret.

"Financial counsellors offer a free and independent service. They can help people navigate through financial hardship, access government payments, and assist with any debt matters.

"It will only be in very rare circumstances that a financial adviser recommending early access of superannuation is doing so in your best interests."

People have also been urged to be alert to scammers who offer to help people access their super early for a fee.

"Trying to scam people out of their super is disgraceful behaviour," Mr O'Halloran said.

"We'd advise people to stay well away from anyone attempting to charge you a fee to help you withdraw your super early.

"If you get an unsolicited email about early access to your super, delete it. If you get an unsolicited call, hang up."