Melbourne’s outer suburbs run down super to survive COVID-19

People in Melbourne’s north-western suburbs were almost 10 times as likely as their counterparts in the city’s affluent eastern suburbs to run down their superannuation to get through the COVID pandemic.

Around one-in-three people in areas such as Meadow Heights, Campbellfield and Craigieburn took money out of their retirement savings. Other hotspots included emerging western suburbs such as Melton while in the city’s south-east a high proportion of residents around Cranbourne drew on their super accounts.

Residents of Melbourne CBD were least likely to withdraw superannuation funds during the pandemic.Credit:Chris Hopkins

Of the 100 areas with the highest proportion of working age people using their super in 2020, 15 of them were in Victoria.

The highest rate of use in the state was across Mickleham-Yuroke where more than 37 per cent of residents took advantage of the scheme. At the outset of COVID, the jobless rate in this area was under 5 per cent.

Across Victoria’s regional centres there were sharp differences in withdrawal rates.

At Bendigo, the highest withdrawal rate of 20.3 per cent was recorded in the California Gully area. But on the other side of the city, the rate dropped to 9.4 per cent in Strathfieldsaye.

Similarly, the southern parts of Ballarat had an access rate of 17 per cent compared to 9.3 per cent in nearby Buninyong.

The Victorian residents least likely to use their super were almost all in a small group of east Melbourne suburbs.

The lowest access rate of 5.2 per cent was recorded for people living in Melbourne’s CBD. Around the Surrey Hills, Glen Iris, Mont Albert and Camberwell area, the access rate was between 5.7 per cent and 6.7 per cent.

Ahead of and during the pandemic, all these areas had unemployment rates around 2.5 to 3 per cent.

John Bardsley, a 38-year-old truck driver from Melton in Melbourne’s outer west, withdrew $10,000 from his super, which had about $60,000 in it at the time, during the first phase of the scheme in 2020.

He had planned to use the money to buy a block of land and build a home near Lang Lang in Melbourne’s outer south-east but “got stuffed around” and, after some delays, didn’t complete the purchase.

After that, he attempted to change careers to excavating but ended up working several different jobs.

He said his $10,000 super withdrawal was mostly spent on rent while he moved between careers.

Melton resident John Bardsley spent $10,000 of his superannuation funds, mostly on rent.Credit:Scott McNaughton

“It was pretty annoying, spending a lot of money that I’d saved,” Bardsley said.

Bardsley said he now believes the withdrawal scheme was a bad idea.

“I heard about a lot of people buying cars and going on holidays later with it,” he said.

“A lot of people took $20,000 out, and you were like, ‘Well, why?’ and they said, ‘It’s my money, why can’t I have it?’ – clearly misunderstanding the role of super in the first place.”

The Morning Edition newsletter is our guide to the day’s most important and interesting stories, analysis and insights. Sign up here.

Most Viewed in National

From our partners

Source: Read Full Article