SMSF contributions almost tripled last quarter

Peter Terlato 15 February 2017

Australian cash money calculator

Further increases expected before superannuation rules change in July.

A new report has found self-managed superannuation fund (SMSF) trustees substantially increased non-concessional contributions in the December quarter, with people taking advantage before super rules change.

The latest SuperConcepts SMSF Investment Patterns Survey shows average contribution levels increased by 181%, from $3,040 in the September quarter to $8,550 in the December quarter 2016.

The survey covers around 2,800 SMSFs with assets totalling $3.2 billion.

Contributions are currently capped at $180,000 per year for individuals under the age of 65. This will be lowered to $100,000 a year on super balances less than $1.6 million.

The federal government's legislative amendments to superannuation rules will apply from July 2017.

SuperConcepts anticipates contribution levels will continue to rise over the next two quarters.

Cash levels rose slightly in the last quarter, up 0.3% between September and December.

The popularity of exchange-traded funds (ETFs) continues to expand. ETFs represent 4% of total assets.

The report also highlighted the ongoing trend to use limited recourse borrowing strategies. Property loans shot up to 81% in December, while asset loans softened from 25% to 19% quarter-on-quarter.

A separate survey concluded self-managed super funds (SMSFs) with a balance of $200,000 or more are likelier to outperform smaller funds as a result of greater diversification opportunities.

Last August, we reported SMSFs seeking capital growth were diversifying their investment options.

SMSFs offer control over how and where you invest your money, but they have their risks too.

If you're looking to switch funds, consolidate your super, better manage your self-employed savings or take out income protection for your nest egg, it's best to compare options and make the right decision.

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