Biggest hit to super funds in 14 years in the wake of rising interest rates

Australians have been whacked by eight consecutive interest rate rises this year but the financial pain isn't quite over, as superannuation fund returns take the biggest hit since 2008.

With skyrocketing inflation pushing cost-of-living pressures up and central banks doing everything to help control the economy, superannuation is expected to be the next victim.

The Motley Fool's Chief Investment Officer Scott Phillips says rising interest rates push asset prices like property down and impacts the returns on super funds.

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"The biggest assets in most super funds are Australian shares and engine shares and residential unlisted properties," he said.

"Add those things together it is a tough quartet of downward pressure on super funds.

"With property and shares going in the same direction, by a big margin, that is why we are having the worst year since the global financial crisis."

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Phillips says he's "hopeful" the majority of the financial pain has materialised and things will be looking up in the new year.

Watch the full financial outlook for 2023 in the video above.

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