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31 Jan 2025 3 min read
The general transfer balance cap represents the maximum amount of superannuation that can be transferred into the retirement phase, where earnings on these funds are tax-free. The cap rises in $100,000 increments based on movements in latest Consumer Price Index (CPI) figures (most recently released on 29 January 2025).
For individuals who begin their retirement phase income stream in the 2025-26 financial year, their personal transfer balance cap will be set at $2m. However, those who have already started a retirement phase income stream before this date may be eligible for a proportional increase in their cap, depending on their circumstances. This adjustment ensures the superannuation system keeps in line with inflation, and retirees maintain their purchasing power over time.
The increase in the transfer balance cap also affects several other superannuation thresholds such as eligibility to make contributions, receive co-contributions and tax offsets.
For instance, a member’s total superannuation balance, which determines eligibility to make non-concessional contributions is directly linked to the transfer balance cap. As the cap increases, individuals can potentially contribute more to their superannuation and access additional benefits and thereby better prepare for retirement.
These additional available benefits in superannuation come at a time when there are concerns that retirees are not fully taking advantage of existing the tax-free benefits available with their superannuation balances.
With these changes individuals should consider and seek advice regarding:
If you have any questions about the above, our national Superannuation team are here to help. Please contact your relationship partner to discuss anything further.
The above information is provided as an information service only and, therefore, does not constitute financial product advice and should not be relied upon as financial product advice. None of the information provided takes into account your personal objectives, financial situation or needs. You must determine whether the information is appropriate in terms of your particular circumstances. For financial product advice that takes account of your particular objectives, financial situation or needs, you should consider seeking financial advice from an Australian Financial Services licensee before making a financial decision in relation to any of the matters discussed.
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