Rising SMSF sector set to slow

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Growth in Australia’s self-managed super fund sector is set to slow after its share in Australia’s super savings fell below 30 per cent last year.

This is the lowest the sector has been in five years. Some industry experts have said that SMSF growth may settle over the next 15 years to make up only 28 per cent of the market, mainly due to more older pensioners holding large balances in funds who are forced to withdraw high amounts (6 per cent of their balance) from when they turn 75.

The SMSF sector has experienced huge growth over the past decade. Last month, the ATO released statistics showing that for the very first time, the average SMSF fund had $1 million.

And while the overall growth in SMSFs has slowed in recent times, there is still strong growth in other areas. In 2015, the number of new SMSFs reached record levels and approximately 2800 new funds were created every month.

In 2014, SMSF contributions totalled around $26.5 billion; $20.4 billion of those being voluntary member contributions. Average balances have also continued to grow which is another good sign that the sector is growing and performing well.

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