subscribe to our newsletter
Retirement income FUM to hit $1tn by 2025

Retirement income FUM to hit $1tn by 2025

Reporter
28 April 2015

Total assets held in the retirement income market are projected to increase from $527 billion at December 2014 to $1,078 billion in December 2024, according to a recent report.

The DEXX&R Market Projections Report, released yesterday, also indicates that SMSFs currently make up 62 per cent of the retirement income market, with funds under management (FUM) of $324 billion.

Retail allocated pensions represent around 30 per cent of FUM, with a total of $160 billion, while 2 per cent is held in annuities and $32 billion, or 6 per cent, is held in industry fund allocated pensions.

By December 2024, retail allocated pensions funds under management are projected to reach $408 billion and represent 38 per cent of the total market while FUM held in self-managed super are projected to reach $515 billion but represent 48 per cent of total assets.

This represents a reduction from the current 62 per cent share SMSFs have in assets in the retirement income phase.

According to the report, a further $18 billion or 2 per cent of total assets are projected to be held in annuities and $136 billion or 12 per cent of total assets in industry fund pension accounts.

Total superannuation funds under management held in the accumulation phase are projected to increase at an average annual growth rate of 7.4 per cent to $3.1 trillion at December 2024, the report said.

The research house has also predicted the risk market will be in “jeopardy”, with risk claims continuing at historically high levels.

Based on the study, individual lump sum in-force premiums are projected to increase “from $6.1 billion at December 2014 to $15.3 billion by December 2024”.

“Individual Disability Income in-force premiums are projected to increase from $2.3 billion at December 2014 to $6.0 billion by December 2024,” said the report.

The report also predicts group risk in-force premiums will increase from $5.4 billion at December 2014 to $15.8 billion by December 2024.

Retirement income FUM to hit $1tn by 2025
smsfadviser logo
join the discussion

Do your clients plan to add additional members to their SMSF if the new six member limit is passed as law?

SUBSCRIBE TO THE
SMSF ADVISER BULLETIN

Get the latest news and opinions delivered to your inbox each morning

In this month's issue:

  • Time wrap
  • The tech bull run
  • From hobby to passion
  • Golden Years
  • An untimely reminder
  • Why change is so difficult
  • Key Strategies for equalising super