In a move long overdue, the ATO will finally raise the contribution cap for superannuation, spelling good news for all Australians, according to one adviser.
Chris Cornish, principal financial adviser at Avant Financial Services, says he welcomes the news that the concessional contribution cap for superannuation will be raised from $25,000 to $30,000 per annum from 1 July this year.
The cap was meant to be increased by the $5,000 two years ago, but until now that has been put on hold.
The increase is also good news for the non-concessional cap, which will be raised from $150,000 to $180,000, said Cornish.
“When the concessional cap goes up, that flows on to the non-concessional cap, which goes up to six times that amount. It’s really significant – I find it exciting,” he said. “It’s going to enable people to get more money into superannuation and salary sacrifice more. The majority of my clients wish to do this.”
The current cap of $25,000 has been harsh on people, who are only able to salary sacrifice about $15,000 of the total amount after deducting employer contributions, Cornish said.
“When you’re heading into retirement, it’s not that much. This [new] move is a step in the right direction.”
Cornish said the increase is also great news for financial services because it allows planners and advisers to make more concrete plans and give their clients what they want.
“I think this has been long overdue. This is really positive news for every Australian, and for [advisers] it helps us achieve our clients’ requirement objectives.
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