Note: We regularly update this article with the latest data on self-managed superannuation funds (SMSFs) issued by the Australian Taxation Office. This article contains the latest data available as at January 2014 (for data up to September 2013).
The latest ATO statistics on SMSFs (representing SMSF activity up to the end of September 2013) highlight some interesting observations that can be made about the current batch of SMSF trustees.
Although attempting to slot just under 1 million trustees running more than 510,000 SMSFs into a box called ‘typical’ is an impossible task, the statistics do shed some light on the average SMSF balance, the ages of SMSF trustees, state of origin, gender balance and income levels.
Note: As at September 2013, there were 986,441 SMSF trustees running 516,925 self-managed super funds.
Average is not always typical
The total amount of wealth owned via SMSFs is over $500 billion ($520.46 billion) – just under a third (31.2%) of all money invested via superannuation funds!
According to the latest data available, the average SMSF balance is approximately $1,007,000, which means that the average fund balance for a SMSF has increased by $39,000 in the past 9 months.
The average account balance for a SMSF member is just over $525,000 ($527,609, as at September 2013). A typical SMSF has 2 fund members, although an ‘average’ SMSF supports 1.9 fund members (that is, dividing the number of SMSF trustees by the number of SMSFs).
The average fund balance however doesn’t necessarily represent a typical SMSF. Here’s a few interesting statistics:
- Nearly one quarter (22.3%) of all SMSFs have $200,000 or less in assets, with 6.7% of SMSFs (just under 35,000 SMSFs) holding less than $50,000 in assets.
- Another quarter (25.6%) of all SMSFs have between $200,000 and $500,000 in fund assets
- Just under a quarter (23.4%) of SMSFs hold between $500,000 and $1 million in assets.
- The remaining quarter-plus (27.7%) have more than $1 million in fund assets with just under 11% of all SMSFs holding more than $2 million in assets. Interestingly, 1.8% of all SMSFs (around 9,305 SMSFs) have fund balances worth $5 million or more.
The size of a SMSF can also be influenced by the number of fund members – presumably, the more members a SMSF has, the more likely the fund balance will be larger. For the record, more than two-thirds (69.2%) of SMSFs have two members, nearly a quarter (22.7%) are single-member SMSFs and 8% of SMSFs have three or four members.
Another significant trend is that the number of Australians setting up SMSFs is not stalling as predicted by many in the super industry only a few years ago – just under 35,000 new SMSFs were established during the 12 months to September 2013 (35,154 to be precise).
SMSF wind-ups: In the 12 months to September 2013, 3781 SMSFs were wound up, compared to 6,528 SMSF wind ups in the previous 12 months to September 2012, and in marked contrast to the 14,115 SMSF wind-ups in the 12 months to September 2010. The spike in wind-ups during 2010 was also linked to compliance activity by the ATO.
Historically, the high wind-up figures for SMSFs in June of each year were due to individuals realising that running an SMSF was more work than they expected, and so they opted to wind up the fund. I find the lower wind-up figures (apart from the 2010 spike) heartening because I interpret this trend as an indication that Australians are doing their research and making an educated choice when deciding whether to set up a SMSF, and whether such a hands-on super fund is appropriate.
SMSF trustees are getting younger…
Well over half (58.2%) of SMSF trustees are aged over 55, but the latest statistics reinforce that the dominance by over-55s is slowly changing as younger generations discover the joys (and tribulations) of running their own funds. Just under a quarter (24.5%) of new SMSF trustees (for funds established during the September 2013 quarter) are over the age of 55, which obviously means that nearly three-quarters of new SMSF trustees under the age of 55, and a significant 43% are under the age of 45.
Looking at both new and existing DIY super trustees, a massive 84% of SMSF trustees (around 828,610) are at least 45 years old, with more than a quarter (25.9%) of SMSF trustees aged 65 or over. When you look at the profile of new SMSF trustees (established during September 2013 quarter) however, only 56.7% of the new trustees are over 45, and nearly a third (30.5%) of the new trustees are aged between 35 and 44 years, with another third (32.2%) of new trustees aged between 45 and 54 years.
Where SMSF trustees live…
Typically, if you’re over 55 and live in New South Wales or Victoria, then you’re more likely than any other Australians to run a SMSF, according to ATO statistics. Nearly two-thirds of all SMSFs (62.4%) are based in Victoria and New South Wales, and more than half (58.2%) of all SMSF members are aged 55 or over. If you’re under the age of 25 and live in Tasmania or Northern Territory, then you’re the least likely to run a SMSF with a mere 1.1% of SMSF members falling into the under-25 category and only 1.4% (7,237) of SMSFs being based in Tasmania, and 0.2% (1,034) in Northern Territory, according to the ATO.
Queenslanders, however, control a healthy 16.6% (85,810) of all SMSFs, and Western Australians run just over 10% (around 53,760) of the 516,925 SMSFs in Australia as at September 2013. South Australia isn’t far behind, with 7.2% of all SMSFs (37,219) being based in South Australia.
Earn less than $80,000…
Two-thirds (66.5%) of SMSF trustees have a taxable income of less than $80,000 a year although this statistic is likely to be distorted by the fact that SMSF trustees receiving payments from SMSF pensions are not required to include this pension income in personal tax returns.
More than half (55%) of SMSF trustees earn less than $60,000 a year, while just under half (42.2%) of all SMSF trustees have a taxable income of $40,000 or less. Nearly a quarter (23.1%) of all SMSF trustees earn less than $20,000, while a similar percentage (22.1%) of SMSF trustees earn $100,000 or more.
And for those curious about the gender balance within SMSFs, females are outnumbered by males, but only just —52.9 per cent of SMSF trustees are men, and 47.1 per cent are women, generally reflecting that many couples start a SMSF together.