The decline in contributions comes as the Australian Investment Exchange anticipates the establishment of new SMSFs to dwindle 18.24% in 2022-23.

Rainmaker Information revealed prior to the introduction of the Transfer Balance Cap for SMSFs in 2017, SMSF member contributions exceeded $38 billion - two and a half times more than the current contribution amount.

The Transfer Balance Cap allows SMSF members to transfer up to $1.6 million into a retirement phase account in order to take advantage of tax breaks.

Importantly, amounts contributed outside of the $1.6 million are taxed at a rate of 15%.

SMSFContributions.JPG

Rainmaker Information Executive Director of Research and Compliance Alex Dunnin noted the introduction of the Transfer Balance Cap (TBC) profoundly changed the nature of the SMSF superannuation segment. 

“It took the segment two years to regain composure after the 2017 tax shock and start growing again,” Mr Dunnin said. 

Mr Dunnin said of greater intrigue for the SMSF sector is that since 2017, transfers out of SMSFs have almost doubled from $5 billion to $10 billion per annum in 2022. 

This comes as Rainmaker Information revealed self-managed funds under management have grown 5.8% p.a. since 2017, markedly slower than the remainder of the superannuation sector at 6.6% p.a.  

“SMSF members no longer seem to see their funds as the place to put their member contributions, but they clearly still see them as a very good place to store vast amounts of family-owned superannuation wealth,” Mr Dunnin said. 

Speaking previously to Savings.com.au, WLTH CEO and Co-Founder Brodie Haupt detailed while a 15% decline in the growth rate of new SMSFs is forecast, WLTH  remains confident SMSFs will continue to be a popular option for Australians who want more say over where and how their retirement savings are invested. 

“Australians understand the importance of having a retirement fund they can control, especially during turbulent times,” Mr Haupt said.

“On top of this, it [self-managed super] presents a number of attractive tax benefits that help our customers shape their wealth-building journey.”

The news comes as the government announced a doubling of the tax rate to super balances above $3 million, while capital gains tax on unrealised gains has also been floated.


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Looking to take control of your retirement? This table below features SMSF loans with some of the most competitive interest rates on the market.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.99% p.a.
7.00% p.a.
$2,659
Principal & Interest
Variable
$0
$230
70%
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7.24% p.a.
7.25% p.a.
$2,726
Principal & Interest
Variable
$0
$0
70%
7.75% p.a.
7.83% p.a.
$2,866
Principal & Interest
Variable
$0
$995
80%
7.55% p.a.
7.94% p.a.
$2,811
Principal & Interest
Variable
$395
$1,920
80%
7.79% p.a.
8.58% p.a.
$2,877
Principal & Interest
Variable
$395
$1,185
85%
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Image by Macro Perch Professional Photographer via Creative Commons





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