Vanguard research shows Australians missing simple ways to boost retirement savings
Australians could be missing out on a simple way to boost their retirement savings, with research from Vanguard showing that nearly half (46%) have never made an additional contribution to their super.1
The superannuation system allows eligible individuals to make additional contributions to their super (capped at $32,500 for the 2026-27 financial year), beyond what their employer pays.
“Many Australians assume that if they miss contributing in one year, that opportunity is lost. But the carry-forward rule means those missed contributions can potentially be used later, when people are better placed financially,” said Renae Smith, Chief of Personal Investor, Vanguard Australia.
The carry forward rule allows individuals to use unused contribution limits from the past five years, increasing how much they can contribute in a single year and boost their retirement savings over time.
Against the backdrop of the Federal Budget and ongoing cost of living pressures, super continues to stand out as a tax effective and attractive long term investment vehicle, subject to concessional tax treatment under current legislation. The ability to make larger, flexible contributions when cash flow allows can help Australians make more meaningful progress towards their retirement goals.
“This is particularly relevant in the current environment, where household budgets are under pressure and income can be uneven. It can benefit those who take career breaks, receive bonuses or inheritances, or experience fluctuations in earnings over time.” said Ms Smith.
Over the last five years, an individual who has not used their concessional contribution caps in certain circumstances, may be able to accumulate up to $137,500 in unused contribution capacity. In the 2025–26 financial year, this could lift the total concessional cap to as much as $167,500, including the standard annual cap of $30,000.
This means that before 30 June, eligible Australians may be able to make a significant one-off contribution to super, on top of employer contributions, taxed at the concessional rate of 15%. Individuals with higher incomes may be subject to additional tax on these contributions increasing the effective rate. It also comes as broader reforms like payday super aim to ensure contributions are paid more frequently and on time, reinforcing the importance of staying engaged with super and making the most of the rules available.
The carry-forward rule is generally available to individuals with a total super balance below $500,000 and allows them to “top up” their super using unused concessional caps from the previous five financial years.
Ms Smith said the timing of voluntary contributions is critical as the end of the financial year approaches.
“Members interested in making a lump sum contribution from their take-home pay should do it at least a week before 30 June to allow time for processing,” she said.
“To claim a tax deduction, you’ll also need to complete a ‘Notice of intent’ form and submit it to your super fund before lodging your tax return.”
For Vanguard Super members, the deadline to make additional personal contributions is Thursday, 25 June to ensure they are included this financial year.
“Still, it’s important to remember that unused caps don’t last forever. If you don’t use it, you lose it. That makes understanding what you have available, and acting before it expires, critical.”
Source: Vanguard’s 2025 How Australia Retires Report – (page 43)
Important Information:
Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer and the Operator of Vanguard Personal Investor and Vanguard Super Pty Ltd (ABN 73 643 614 386 / AFS Licence 526270) (the Trustee) is the trustee of Vanguard Super (ABN 27923449966) and the issuer of Vanguard Super products. We have not taken your objectives, financial situation or needs into account when preparing the information so it may not be applicable to the particular situation you are considering. You should consider your objectives, financial situation or needs, and the Product Disclosure Statement (PDS) and any other relevant disclosure documents for Vanguard Superannuation, before making any investment decision. You should seek professional advice from a suitably qualified adviser. The Target Market Determinations (TMDs) for Vanguard’s financial products, each of which includes a description of who the financial product is likely to be appropriate for, are also available free of charge. You can access our PDSs, other offer documents and TMDs at vanguard.com.au (other than any superseded TMD) or by calling 1300 655 101.
Any examples are illustrative only and assumptions may change. Actual outcomes will depend on individual circumstances and legislative settings. Superannuation is subject to legislative change, and investment returns are not guaranteed.
