Note: Every few months, we 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 March 2012 (for data as at December 2011). We expect the ATO to release further data in June 2012.
The latest ATO statistics on SMSFs (representing SMSF activity up to the end of December 2011) highlight some interesting observations that can be made about the current batch of SMSF trustees.
Although attempting to slot around 880,000 trustees running just under 460,000 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.
Average is not always typical
The total amount of wealth owned via SMSFs is $400 billion – around a third of all money invested via superannuation funds!
According to the latest data available, the average SMSF balance is approximately $872,000, which means that the average fund balance for a SMSF has dropped nearly $100,000 in the nine months from March 2011 to December 2011. The drop in the average SMSF balance may be linked to one or more of the following events:
- poor
- new SMSFs starting with lower average opening balances than previously
- SMSF
The average fund balance however doesn’t necessarily represent a typical SMSF. Here’s a few interesting statistics:
- Around a quarter of all SMSFs have $200,000 or less in assets, with 6.8% of SMSFs (just over 31,000 SMSFs) holding less than $50,000 in assets.
- Another quarter (25.9%) of all SMSFs have between $200,000 and $500,000 in fund assets
- Just under a quarter (23.1%) of SMSFs hold between $500,000 and $1 million in assets.
- The remaining quarter (26.8%) have more than $1 million in fund assets with just over 10% of all SMSFs holding more than $2 million in assets.
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, two-thirds (68.8%) of SMSFs have two members, nearly a quarter (22.6%) are single-member SMSFs and just under 10% 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 – just under 33,000 new SMSFs were established during the 12 months to June 2011. The trend continues when looking at the 6 months to December 2011: just over 16,000 new SMSFs were established, with 10,326 set up in the September 2011 quarter, and 5,915 set up in the December quarter.
SMSF wind-ups: A startling statistic from the latest data is that the number of SMSFs that were wound up has dropped dramatically over the past year, although the June quarter continues to highlight a spike in SMSF wind-ups as Australians tidy up their affairs for the financial year. In the 12 months to June 2011, only 3,221 SMSF wind-ups were reported, with 2,151 of those wind-ups taking place in the June 2011 quarter. In contrast, during the 12 months to June 2010, the number of SMSF wind-ups spiked to 14,532 with 11,982 of these wind-ups taking page in the June 2010 quarter. 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.
SMSF trustees are getting younger…
More than half (56%) 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. Two-thirds (67%) of new SMSF trustees (for funds established during the December 2011 quarter) are under the age of 55, with 35% of new SMSF trustees under the age of 45.
Looking at both new and existing DIY super trustees, 81% of SMSF trustees (around 708,000) are at least 45 years old, with nearly a quarter (22.4%) of SMSF trustees aged 65 or over. When you look at the profile of new SMSF trustees (established during December 2011 quarter) however, only 65% of the new trustees are over 45, and around a quarter (23.5%) of the new trustees are aged between 35 and 44 years, with a third (32% 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 (63%) are based in Victoria and New South Wales (and ACT), and more than one-half (56%) 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% of SMSF members falling into the under-25 category and only 1.4% (6,420) of SMSFs being based in Tasmania, and 0.2% (920) in Northern Territory, according to the ATO.
Queenslanders, however, control a healthy 17% (around 77,500) of all SMSFs, and Western Australians run 11% (around 51,000) of the 460,000 or so SMSFs in Australia. South Australia isn’t far behind, with 7.3% of all SMSFs (around 33,500) being based in South Australia.
Earn less than $80,000…
Nearly three-quarters (72.2%) 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.
Sixty per cent of SMSF trustees earn less than $60,000 a year, while just under half (46.6%) of all SMSF trustees have a taxable income of $40,000 or less. Around 20% 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 —54 per cent of SMSF trustees are men, and 46 per cent are women, generally reflecting that many couples start a SMSF together.
