Finances - advice from those who have been there and done it already! Pensions too.
#1
BE Forum Addict
Thread Starter
Joined: Oct 2004
Location: Mona Vale, Northern Beaches, Sydney
Posts: 1,076
Finances - advice from those who have been there and done it already! Pensions too.
Hi,
Well after a rollercoaster of a day we may be close to an outcome (we have been asked for meds).
Therefore, can we please have advice for the things we should do prior to moving. We are both public sector workers who have fairly good pensions, (one pension is really good). Do we sort this now, is there a problem with validating our visa (on a short trip) and sorting it out when we settle? Are there any hidden pitfalls for burying our head in the sand now and dealing with finances later?
Thanks, I am also going to post this on the lifestyle forum for those who have already been there and done it to see.
Tara
Well after a rollercoaster of a day we may be close to an outcome (we have been asked for meds).
Therefore, can we please have advice for the things we should do prior to moving. We are both public sector workers who have fairly good pensions, (one pension is really good). Do we sort this now, is there a problem with validating our visa (on a short trip) and sorting it out when we settle? Are there any hidden pitfalls for burying our head in the sand now and dealing with finances later?
Thanks, I am also going to post this on the lifestyle forum for those who have already been there and done it to see.
Tara
#2
BE Forum Addict
Thread Starter
Joined: Oct 2004
Location: Mona Vale, Northern Beaches, Sydney
Posts: 1,076
Re: Finances - advice from those who have been there and done it already! Pensions too.
Originally Posted by ali south
Hi,
Well after a rollercoaster of a day we may be close to an outcome (we have been asked for meds).
Therefore, can we please have advice for the things we should do prior to moving. We are both public sector workers who have fairly good pensions, (one pension is really good). Do we sort this now, is there a problem with validating our visa (on a short trip) and sorting it out when we settle? Are there any hidden pitfalls for burying our head in the sand now and dealing with finances later?
Thanks, I am also going to post this on the lifestyle forum for those who have already been there and done it to see.
Tara
Well after a rollercoaster of a day we may be close to an outcome (we have been asked for meds).
Therefore, can we please have advice for the things we should do prior to moving. We are both public sector workers who have fairly good pensions, (one pension is really good). Do we sort this now, is there a problem with validating our visa (on a short trip) and sorting it out when we settle? Are there any hidden pitfalls for burying our head in the sand now and dealing with finances later?
Thanks, I am also going to post this on the lifestyle forum for those who have already been there and done it to see.
Tara
#3
Re: Finances - advice from those who have been there and done it already! Pensions too.
Questions about whether to get some advice before you go pop up occassionally and get very few answers. Shame as I would like to know too. I can only assume that most people decide to put it in the "too difficult" pigeon hole and ignore it, at least until they get out there. I have heard of people being quoted £3000 for the advice too so no wonder we all run shy.
#4
Re: Finances - advice from those who have been there and done it already! Pensions to
Originally Posted by worzel
Questions about whether to get some advice before you go pop up occassionally and get very few answers. Shame as I would like to know too. I can only assume that most people decide to put it in the "too difficult" pigeon hole and ignore it, at least until they get out there. I have heard of people being quoted £3000 for the advice too so no wonder we all run shy.
Best thing to do is ask the financial agents and then put the info on the forums so others can see it as well.
Make sure that all their charges are given to you in writing before you commit to signing any contract to continue and that you have brought all the information with you to your appointment that they will need to assess your case. e.g. how many pensions you have, the value (although be careful on telling them this too early on!), the type of pensions (final salary, stakeholder etc), the providers etc.
Also find out if the receiving Superannuation fund has any fees for taking your money (and also what their annual charges are). Oz Superannuations can be much more flexible then UK pensions so is worth doing a bit of research. e.g. I believe your Superannuation fund could own business premises (and have a mortgage on it) which you then rent (out to yourself!) and hence you can get Tax Relief! (e.g. if you are doing a Self-Managed Superannuation which is not recommended if you have less than AUS$100k available in your fund)
It is worthwhile getting the latest valuations of your pensions so you can see what sort of figures you are playing with. In general it should take 2-4 weeks to get a valuation. The thing to check here is whether the Fund Value = Transfer Value (i.e. are you penalised for transferring).
My Norwich Union Pension and Standard Life Pension do not have any transfer penalties while my BT final salary one is valued at around £8k but has a transfer value more like £5.5k.
Some providers may not make it easy for you to transfer your pension abroad, not sure on the legal side of this, i.e. are they allowed to stop you transferring abroad to an approved scheme rather than to another uk scheme.
Pensions is definitely one of the main areas where it makes sense to not mess it up due to the tax liabilities!
Also, consider whether you are likely to move back to the UK. If there is a real chance of this you may not want to transfer your pension(s) to Oz. I have no idea about transferring pensions back from Oz to the UK, I presume it can be done however do not know the fees/tax implications.
Pensions may be boring, and they may not be worth much by the time you are 60, however every little helps!
Depending on how much cash you have floating around, it can be tax advantagous to put your maximum contributions into your UK pension prior to transferring. e.g. if you are a higher rate tax payer and are say 30 years old you can put a total of 17.5% of your earnings into your pension (you can do more as you get older), however you only need to pay 60% of the amount as the government will give you a tax rebate on the rest which will get paid in.
i.e. if you earn £50k a year you can pay a total of £8750 a year into your pension, however you only have to write a cheque for £5250.
Do note however that same as the UK you cannot access the money until you are around about 60 years old (can't remember the exact age limit).
If you want to research SuperAnnuations and Financial Oz matters then websites such as:
http://moneymanager.smh.com.au/inves...per_guide.html
http://www.infochoice.com.au/
http://www.moneymanagement.com.au/
are a good place to start.
I am not a financial adviser though, so you'll need to check and make your own decisions!
Alex - everyone will no doubt think I am a boring old man now!!!!
#5
Re: Finances - advice from those who have been there and done it already! Pensions to
Originally Posted by ali south
Therefore, can we please have advice for the things we should do prior to moving. We are both public sector workers who have fairly good pensions, (one pension is really good). Do we sort this now, is there a problem with validating our visa (on a short trip) and sorting it out when we settle? Are there any hidden pitfalls for burying our head in the sand now and dealing with finances later?
Get professional advice, but do bear this point in mind. Also remember that should you return to the UK (or go to live elsewhere) in a number of years, having transferred a pension to Australia may not have made much sense in retrospect.
Also consider do you want *all* your investments in Australian dollars? It may make sense to have part of your pension income fixed in GBP - people who migrated to South Africa in the 1970s and 1980s have been badly caught out by the depreciation of the Rand.
If you have made additional voluntary contributions check to see if these can be detached from your main pension as maybe you might look at transferring just this element.
Jeremy
#6
Migration Agent
Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: Finances - advice from those who have been there and done it already! Pensions too.
I have heard of apparently large sums of money being charged too. However, would you pay GBP3,000 for advice that saved you GBP100,000 ... or maybe saved you somewhat less? For some (most?) that might be money well spent.
I tend to agree with Jeremy's comments about final salary schemes, although I have heard that some companies are changing the basis on which the pension arising from such schemes will be paid (I recall seeing a 1/60th scheme changing to a 1/100th scheme recently). When you throw the complexity of the taxation of pensions paid to an Aussie tax resident from a UK policy compared with the taxation of a transferred pension into the mix, add in the transferability of benefits to a surviving spouse/partner, and factor in the vagaries of exchange rates a number of years hence I'm not surprised some put the issue into the "too hard basket".
However, my view is that taking advice is a must, not least because doing nothing can give rise to an avoidable tax liability.
I (and/or my financial planning colleagues) will be happy to help if persons affected would like to complete their details here (excuse the piccie!):
http://www.collettandco.com/contact.cfm
Best regards.
I tend to agree with Jeremy's comments about final salary schemes, although I have heard that some companies are changing the basis on which the pension arising from such schemes will be paid (I recall seeing a 1/60th scheme changing to a 1/100th scheme recently). When you throw the complexity of the taxation of pensions paid to an Aussie tax resident from a UK policy compared with the taxation of a transferred pension into the mix, add in the transferability of benefits to a surviving spouse/partner, and factor in the vagaries of exchange rates a number of years hence I'm not surprised some put the issue into the "too hard basket".
However, my view is that taking advice is a must, not least because doing nothing can give rise to an avoidable tax liability.
I (and/or my financial planning colleagues) will be happy to help if persons affected would like to complete their details here (excuse the piccie!):
http://www.collettandco.com/contact.cfm
Best regards.
Originally Posted by worzel
Questions about whether to get some advice before you go pop up occassionally and get very few answers. Shame as I would like to know too. I can only assume that most people decide to put it in the "too difficult" pigeon hole and ignore it, at least until they get out there. I have heard of people being quoted £3000 for the advice too so no wonder we all run shy.
#7
Re: Finances - advice from those who have been there and done it already! Pensions to
Originally Posted by Alan Collett
I have heard of apparently large sums of money being charged too. However, would you pay GBP3,000 for advice that saved you GBP100,000 ... or maybe saved you somewhat less? For some (most?) that might be money well spent.
I tend to agree with Jeremy's comments about final salary schemes, although I have heard that some companies are changing the basis on which the pension arising from such schemes will be paid (I recall seeing a 1/60th scheme changing to a 1/100th scheme recently). When you throw the complexity of the taxation of pensions paid to an Aussie tax resident from a UK policy compared with the taxation of a transferred pension into the mix, add in the transferability of benefits to a surviving spouse/partner, and factor in the vagaries of exchange rates a number of years hence I'm not surprised some put the issue into the "too hard basket".
However, my view is that taking advice is a must, not least because doing nothing can give rise to an avoidable tax liability.
I tend to agree with Jeremy's comments about final salary schemes, although I have heard that some companies are changing the basis on which the pension arising from such schemes will be paid (I recall seeing a 1/60th scheme changing to a 1/100th scheme recently). When you throw the complexity of the taxation of pensions paid to an Aussie tax resident from a UK policy compared with the taxation of a transferred pension into the mix, add in the transferability of benefits to a surviving spouse/partner, and factor in the vagaries of exchange rates a number of years hence I'm not surprised some put the issue into the "too hard basket".
However, my view is that taking advice is a must, not least because doing nothing can give rise to an avoidable tax liability.
Also think carefully before transferring a final salary scheme, especially if you have been at the company for quite a long time as these types of pensions are usually very very valuable (which is why many companies have now stopped doing final salary schemes!)
With respect to spending £3k to save £100k then yes that is probably money well spent. I would suggest though to get in writing the amount of money that an adviser says they can save you, together with any caveats and assumptions they have made even if they do not give you all the details of how they will achieve the saving. (Alan, is that a fair request for someone to make?) The last thing you want is to end up in Oz and find you have a big tax liability that was not expected. The ATO and Inland Revenue are unlikely to accept the fact that you were given duff advice!
It is fair to say that an adviser is not going to give you all the details of how they can save you £100,000 until you have signed up with them. Otherwise what is to stop you taking the information and not using their services. They should however be fairly open about how much they can save you.
If you are dealing with a company to give you advice, make sure they have registered people for the FSA and the Oz equivalent (Alan, what is it called?) and don't necessarily be taken in by large full page adverts in the "Australian News". There is one Migration Agent (...Contact) who do full page adverts and people presume they are MARA registered, they are not. They also offer a no visa, no fee type promise. However if you read on this forum then there are people who have had difficulties getting their fees returned when the visa application has failed (maybe for valid reasons). To be fair there are people who have used them and had no problem obtaining their visas. The main point here is to ask lots of questions and have as much knoweldge before hand of what questions to ask!
If you look on the forums then you will find Alan usually gets recommended by people who have used him so he should be on your short list of advisers to contact. It is also worth talking to your usual Financial Adviser (if you have one), although they probably won't know much about the Oz side of things they should have a reasonable view of your assets and other financials.
Also if you are going out on a retirement/parent visa and are considering starting to draw on your pension this year then there are some quite large changes happening to the UK pension regulations in July (IIRC) and this may mean that for some people it becomes much more important to either start drawing on their pension prior to July, or post July depending on circumstances. Once again take a look on the Internet, plenty of information around about the forth coming changes and how it will affect people. Also chat to your Financial Adviser.
Alex