General Transfer Balance Cap Increasing from 1 July 2026

From 1 July 2026, the general transfer balance cap will increase from $2 million to $2.1 million. This change is being made because inflation for the year to December 2025 was high enough to trigger an automatic rise of $100,000 in the cap.

What Is the General Transfer Balance Cap?
The general transfer balance cap is a limit on how much of your superannuation can be moved into the retirement phase, where investment earnings, such as interest, dividends and capital gains, are tax free.

Any super you have above this limit stays in your accumulation phase, where earnings are taxed at up to 15%.

What the Change Means

  • A higher limit for people starting a pension after 1 July 2026
    Anyone starting their first retirement phase income stream after this date will be able to start with up to $2.1 million, instead of $2 million.
  • Different outcomes for people already in pension phase
    If you already have a retirement phase pension, your personal cap may increase, but not necessarily by the full $100,000. How much it increases depends on how much of your previous cap you’ve already used. People who have already used their full cap will not receive an increase.
  • Contribution caps may shift too
    It is highly likely that the contribution caps will increase too. Unlike the Transfer Balance Cap, contributions caps are indexed according to wages (AWOTE), rather than CPI, and the relevant AWOTE figures are not released until 26 February 2026.  However, based on past data, it is expected that:
    • The concessional contributions cap will increase from $30,000 to $32,500
    • The non-concessional contributions cap will increase from $120,000 to $130,000

Why the Cap Is Increasing
The cap is linked to the Consumer Price Index (CPI). As CPI rose by 3.8% in the year to December 2025, this was high enough to trigger the $100,000 increase.

Here’s a summary of key changes to the superannuation pension cap taking effect from 1 July 2026:

  • The tax free pension phase limit increases to $2.1 million.
  • New retirees can start a pension with more money in the tax free environment.
  • Existing pensioners may or may not receive an increase, this depends on their past usage of the cap.

If you’re uncertain about how the upcoming changes to the Transfer Balance Cap could affect your retirement strategy, now’s the time to get expert guidance. Speak with our SMSF Specialists today to discuss your personal circumstances and ensure you’re making the most of the new rules.

Call us on 1300 363 866 or visit our Contact Us page.



McConachie Stedman Financial Planning Pty Ltd is a Corporate Authorised Representative of MCS Financial Planning Pty Ltd | ABN 11 677 710 600 | AFSL 560040

General Advice Warning
The information provided in this article is for general information purposes only and is not intended to and does not constitute formal taxation, financial or accounting advice. McConachie Stedman does not give any guarantee, warranty or make any representation that the information is fit for a particular purpose. As such, you should not make any investment or other financial decision in reliance upon the information set out in this correspondence and should seek professional advice on the financial, legal and taxation implications before making any such decisions.