Leakage: How Australians Can Stop Losing Money in 2025

Every dollar counts, especially in 2025’s cost-of-living crunch. Yet, many Australians are losing money to a silent threat: financial leakage. Whether it’s sneaky bank fees, tax inefficiencies, or unnecessary investment costs, leakage can quietly erode your wealth over time. Understanding where and how leakage occurs is the first step to plugging these financial holes and boosting your bottom line.

What Is Financial Leakage?

In finance, leakage refers to money that escapes your intended savings, investments, or budget—often without you realising it. In 2025, leakage is a hot topic for both households and investors, as inflation, rising interest rates, and new policy changes amplify its effects. Leakage can take many forms:

• Superannuation leakage: Early withdrawals, high fees, or unclaimed super accounts.

• Banking leakage: Unnecessary account fees, ATM charges, or subpar interest rates.

• Investment leakage: Excessive brokerage or fund management fees, poor tax planning.

• Tax leakage: Missed deductions, failing to claim government rebates, or inefficient structuring.

Even small leaks can add up. According to the Association of Superannuation Funds of Australia, Australians lost over $13 billion in unclaimed super in 2024—a staggering figure that highlights the scope of the problem.

Where Leakage Hits Hardest in 2025

Several areas are especially prone to leakage this year, due to evolving economic conditions and policy changes:

1. Superannuation Fees and Forgotten Accounts

With new rules in 2025 tightening early access and requiring funds to proactively consolidate inactive accounts, there’s renewed focus on super leakage. Many Australians still pay multiple sets of fees on small or forgotten super balances. The Australian Taxation Office (ATO) continues its campaign to reunite people with lost super, but it pays to check your MyGov account and consolidate balances yourself.

2. Investment Costs in a Rising Rate Environment

Interest rates remain elevated in 2025, and investment platforms have responded by tweaking their fee structures. Actively managed funds, for instance, may charge over 1% annually—potentially eating thousands from your returns over time. ETFs and index funds, by contrast, often charge under 0.3% and are gaining popularity among cost-conscious investors. With markets volatile, watching your investment costs is more important than ever.

3. Tax Inefficiencies and Missed Rebates

Tax policy changes introduced in the 2024–25 Federal Budget have increased the Low and Middle Income Tax Offset (LMITO) and introduced new energy rebates for eligible households. However, many Australians still miss out on these benefits due to poor record-keeping or lack of awareness. Not claiming all possible deductions, especially for work-from-home expenses or investment property costs, is a common source of leakage.

Plugging the Leaks: Actionable Steps for Australians

Stopping financial leakage isn’t just about cutting costs—it’s about making your money work harder. Here are practical strategies to plug the leaks in 2025:

• Audit Your Super: Log in to MyGov, find lost super, and consolidate accounts to reduce duplicate fees.

• Compare Bank Accounts: Switch to fee-free accounts or negotiate better rates. Avoid ATM networks that charge extra.

• Scrutinise Investment Fees: Use low-cost ETFs or index funds where appropriate. Check for hidden platform or advice fees.

• Claim All Tax Deductions: Review ATO guidance and keep detailed records for deductions and rebates, especially under new 2025 rules.

• Automate and Track: Use budgeting apps to monitor subscriptions and recurring expenses—common sources of leakage.

These steps may sound simple, but collectively they can add thousands to your annual savings or investment returns.

The Bottom Line: Don’t Let Leakage Drain Your Future

Leakage is the hidden enemy of financial progress. In a year marked by economic shifts and policy updates, Australians who actively seek out and plug these leaks will be best placed to protect and grow their wealth. Take charge of your finances in 2025—your future self will thank you.