Sydney, 24 September 2025 – Leading cloud-based accounting and SMSF administration software provider Class has released its 2025 Annual Benchmark Report, highlighting record SMSF growth, increasing participation from younger generations, and the sector’s resilience despite regulatory uncertainty around the proposed Division 296 tax changes.
As at 30 June 2025, the number of SMSFs industry-wide reached a record 653,062, with total assets surpassing $1.05 trillion, underscoring the enduring appeal of SMSFs as a flexible solution for Australians seeking greater control of their retirement outcomes. In FY25, SMSF establishments increased to 6.4%, with approximately 42,000 new funds – the strongest growth since FY17.1
Class CEO Tim Steele said the findings from the Benchmark Report showcase how strongly SMSFs are resonating with Australians.
“SMSFs continue to attract a broadening range of Australians who want flexibility, choice, and control in how they save for their retirement. This growth demonstrates the sector’s resilience and its ability to evolve in line with members’ needs, even as the regulatory landscape shifts.”
Benchmark Report data shows SMSFs are proving increasingly attractive to younger Australians. Generation X (45–59) led the way in FY25, accounting for 49.0% of new establishments, while Millennials (30–44) followed at 37.3%, reflecting their growing engagement with wealth creation and the flexibility SMSFs offer.2
On Class, the average age of new SMSF members was 48 years, compared with 61.6 years for all SMSF members. At the same time, the average starting balance for new funds decreased by 29.4%, from $515,000 to $363,000, indicating SMSFs are becoming more accessible to Australians with more modest balances, and they are being established earlier in their journey towards retirement.2
While younger Australians are increasingly establishing SMSFs, the report shows that older SMSF members are far more likely to transition from accumulation to retirement income streams than members of APRA-regulated funds.
Class SMSF members aged 60 to 64 are more than twice as likely to start either a Transition to Retirement Income Stream or Retirement Phase Income Stream than APRA fund members. With 93.0% of Class SMSF members over the age of 65 in retirement phase compared to just 49.2% of APRA fund members, and typically holding higher balances at this stage, the findings reinforce the need for strategic planning to maximise tax savings and retirement income.2
SMSFs delivering and growing
The Benchmark Report shows SMSFs are delivering as a long-term solution for Australians. The average SMSF on Class has been established for 15.6 years in FY25, with 66% of funds operating for over a decade.
Currently, the average SMSF fund balance is almost $1.9 million, and the average member balance is $990,000, highlighting SMSFs as an effective solution for long-term wealth accumulation.2
“SMSFs are not short-term experiments, they are a strategic solution for long-term wealth creation and increasingly are a cornerstone of retirement planning in Australia,” said Steele.
Division 296: A bigger tax impact than anticipated
The proposed Division 296 tax changes are expected to have a larger impact than previously estimated. Analysis of FY24 Class tax return data shows that approximately 18,200 Class members could be affected, each facing an average liability of $51,700.2
This equates to a potential total tax liability of $940.9 million for Class members only, up from previous market data estimates of $825 million, indicating that SMSFs overall are likely to contribute significantly to the Government’s projected $2.3 billion in tax revenue during the first year.2
Given the S&P/ASX 200 increased by 10.2% during FY25, with one in four SMSFs holding more than 27.5% of their portfolio in domestic shares, a greater proportion of SMSFs could potentially exceed the $3 million threshold.2,4
Direct property remains popular; proposed Division 296 prompts closer review
Almost 30% of Class SMSFs held direct property investments in FY25, valued at approximately $74.0 billion. Property allocations decreased slightly in FY25, down 1.1% and the proportion of SMSFs that held property decreased by 0.9%. This could be due to trustees reducing exposure to direct property ahead of potential Division 296 changes.2
The Benchmark Report identified 6.7% of SMSFs impacted by Division 296 as having insufficient liquidity to meet their liabilities, up from 5% in 2024. It is essential for trustees to maintain current property valuations to effectively plan for liquidity needs and meet the Australian Taxation Office’s increasing expectation that valuations accurately reflect prevailing market conditions.
Residential property remains dominant, accounting for around half of a fund’s assets, (whether held outright or with a Limited Recourse Borrowing Arrangement (LRBA)), versus about one-third for funds holding commercial property.2
Around one in four property investments in Class SMSFs are funded through LRBAs, with about 92% of LRBAs tied to residential property. This could imply that SMSFs are being considered by younger Australians as a pathway into the housing market at a time when affordability remains a national challenge.2
For a full copy of the Class 2025 Annual Benchmark Report, please visit here.
1 ATO SMSF Quarterly Statistical Report June 2025
2 Class Annual Benchmark Report – Built to last: Continued growth in a mature SMSF sector
3 Superannuation in Australia: a timeline, APRA
4 Stocks climb ‘wall of worry’ as ASX 200 gains 10 per cent over financial year 2025
For media inquiries contact:
Fiona Harris
Mob: 0466 012 434
Email: fharris@hub24.com.au
About Class
Class is a pioneer in cloud-based wealth accounting and is recognised as one of Australia’s most innovative technology companies, delivering trust accounting, portfolio management, legal documentation, and corporate compliance solutions to financial professionals across Australia.
For further information, please visit www.class.com.au
About HUB24
HUB24 Limited is listed on the Australian Securities Exchange, and includes the award-winning HUB24 platform, HUBconnect, Class and myprosperity.
The HUB24 platform offers advisers and their clients a comprehensive range of investment options, including market-leading managed portfolio solutions, and enhanced transaction and reporting functionality. As one of the fastest growing platforms in the market, the platform is recognised for providing choice and innovative product solutions that create value for advisers and their clients.
HUBconnect focuses on leveraging data and technology to provide solutions to common challenges for stockbrokers, licensees and advisers and enable the delivery of professional advice to more Australians.
For further information, please visit www.HUB24.com.au
