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The general transfer balance cap is set to increase to $2 million on 1 July 2025, following the release of quarterly CPI data yesterday.
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Transfer balance cap for super to jump to $2m
30 January 2025
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7 minute read
With the All Groups CPI figure reaching 139.4 for the December 2024 quarter, the general transfer balance cap will be indexed for the 2025–26 year, increasing to $2 million from $1.9 million.
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The general transfer balance cap limits the amount of money that can be transferred into the retirement phase in super.
Colonial First State head of technical services Craig Day said the increase means clients commencing their first retirement phase income stream in 2025–26 will start with a personal transfer balance cap of $2 million.
“Clients who already have a personal transfer balance cap that they have not fully utilised at any time in the past will see their cap increase on 1 July 2025 by a smaller amount due to proportional indexation,” he said.
The increase in the transfer balance cap also affects other superannuation rules and concessions including the total superannuation balance, which will also increase to $2 million.
A member’s total super balance at 30 June 2025 will need to be less than $2 million for them to access the standard non-concessional contributions cap, Day explained.
Smarter SMSF technical and education manager Tim Miller said the increase in the general transfer balance cap was largely speculated to happen given the trend in CPI data over the past year.
“The only thing that might change it is an election and an announcement by government, but that $2 million is the expected and legislative result from the 1 July,” Miller said.
While the general transfer balance cap is set to increase in July, Miller said it is unlikely the contribution caps will increase this year.
The concessional and non-concessional contribution caps for the 2025–26 year won’t be known until the average weekly ordinary time earnings (AWOTE) figure is released next month.
“For us to get indexation of the caps we need to get a factor of 1993.5 and the last factor release was 1923.40, so you could pretty much guarantee that we’re not seeing a contribution at indexation even though we’ve seen wages growth – it isn’t strong enough to push it up a level,” he said.
“It may very well be that we don’t even see that until 2027 with the disparity in that number there.”
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