The 2023 Class Annual Benchmark Report analyses the data behind the SMSF sector to identify key trends shaping our industry.

The report showed that the 610,287 SMSFs comprise $876.4 billion, or 24.8 per cent of the $3.54 trillion super industry.

“This report highlights a number of trends that will drive growth in the sector, including rising contributions, particularly for older Australians; the continued popularity of SMSFs as a cost-effective retirement saving vehicle; and a higher ratio of rollovers in, to rollovers out for SMSFs,” said Tim Steele, CEO of Class.

“In the context of macroeconomic events during FY23, including high inflation and rising interest rates, the SMSF sector has continued to grow, with fund establishments rising by 3.8 per cent, bringing the total number of funds to more than 610,0001 – the highest to date,” Mr Steele said.

According to the report, the median age of members of newly established funds for FY23 was 48 years, a slight increase from 2022 when the median age was 47 years.

One of the more surprising statistics from this year’s report was the rise in both concessional and non-concessional contributions by SMSF members.

The data showed the average concessional contribution rose by 11.2 per cent to $21,986, while the average non-concessional contribution increased by 28 per cent to $67,155.

“The argument can be made that this rise in contribution rates signifies a positive shift in the confidence and sentiments around SMSFs,” Mr Steele said.

“Ultimately people are making the choice to put more money into SMSF and it illustrates they are confident it will support them long-term into retirement.”

He added that legislative changes, such as those made to the work test, and the super guarantee increase have also had an impact.

SMSF members enjoy more benefits

Moreover, the analysis revealed that SMSF members are more likely to enjoy tax-free earnings in the retirement phase compared to APRA members.

Nearly one in two (49 per cent) of APRA fund members aged 65 and over still have their entire superannuation balance in the accumulation phase, compared to one in eight (12 per cent) of those in SMSFs.

Mr Steele said this indicates SMSF members have a higher engagement with their super savings and better advice in regard to accessing the best tax outcomes into their retirement years.

The report also showed there is a lower gender gap in regard to the amount of savings for SMSFs.

In fact, it revealed the gender gap is narrowing in SMSFs compared to APRA funds, with a negative gap – women having a higher balance than men – in their 20s and 30s.

Overall, the gender gap for SMSFs decreased to 15.1 per cent in FY23 compared to 15.9 per cent in the previous year.