cheshire-cat

I have just finished reading an article in the daily mail about the latest initiative from the UK pensions office.
The proposal is that people who retire before the new flat rate pension comes into force in 2016 will be able to boost their pension by up to 25 pound per week by paying a lump some of 22000 pounds, or 890 pounds per 1 pound a week increase.
What a bloody joke, not only would we get half of the increase taken off us by centrelink but the whole pension is frozen anyway, so that people in the UK who pay the lump sums will see their pensions go up each year with inflation, expats who pay exactly the same lump sum will not get the annual inflation increases.
So no thanks, I will not be shelling out 22000 pounds for the privilege of getting ripped even more.

Grayling

The British government aren't responsible for what centre link choose to do and this is not really aimed at expats.

It is not that bad a deal if you are UK resident.....it is something I might consider when I return.

cheshire-cat

Well of course Grayling, if you are going to live in the UK then this might appeal to you but as this is an Expat forum, my remarks were made from the perspective of an Expat and for me it doesn't even approach good value.

Grayling

.....and no one is forcing you to go for it....in fact it would not make any sense for an expat to do so.

.....but expats do return you know....this forum is for them as well

cheshire-cat

So if you agree with me that this makes no sense for an expat, then what is the point you are trying to make?

Grayling

You were being indignant and calling it a joke.....it is not....it could be useful for British pensioners

Why should the government design something to benefit people who choose to no longer live there?

.....and it does make sense for expats who intend to return and that will be quite a big percentage.

cheshire-cat

Ok have it your way, I wasn't looking for an argument, and yes I am indignant, that the uk refuses to unfreeze my pension simply because of where I choose to live.

Grayling

Perhaps you should also check out why the pensions were frozen in the first place....it was not entirely the British government's doing.

Also be thankful that you may get a British pension at all because if you were an Australian living abroad you would not get the full Australian 'pension' (which is really a means tested benefit so many Australian pensioners get very little of it or none at all).......and you would need to be living in Australia when you claim it.

Toe Dipper

On the subject of pensions, to add insult to injury,just read this......

Changes announced in the UK budget on 19th March, likely to be effective from April 2015, will ban transfers from public sector final salary schemes. This will affect medical professionals such as nurses, doctors, dentists and specialists as well as teachers, police officers, firefighters - indeed ALL GOVERNMENT EMPLOYEES.

The ban will prevent transfers to Australia, leaving members with less than 12 months to take action. Alarmingly this ban may also be extended to members of private sector final salary schemes.

TD

Kiwipaul

So you just have to leave it in the UK, so what, you are still entitled to the pension payments when you retire, and they just transfer the payments to you Oz bank account.
You don't loose any money you are just restricted from transferring the capital.

Grayling

Public sector final salary schemes remain index linked in the UK. Moving a final salary pension can be a very bad idea.

Amazulu

Not often that I would agree with you G but I do on this

john in oz

The proposed announcements means that pension funds such as NHS, Police, teachers and Local government etc can not be moved from April 2015.

They have indicated that they would also like to include private defined benefit schemes ie ones you have with a non government employer to also be included - however this is not likely at this time but obviously the writing is on the wall for this in the future.

Without getting into a to and fro session here - the two main considerations for moving ones pensions to Australia are simply:

1. Moving to Australia puts it in a tax free environment when it is placed into a pension - as opposed to the UK.

2. Should you die in the UK the inheritance tax is approx 40% - that is a fair bit for your estate to loose.

So for many people it makes sense to move pensions over and take it out of an environment where heavy taxes may result.

Additionally the recent proposals state that you will be able to access your funds in the UK from aged 55 as a 100% lump sum - however only 25% is tax free and the remaining 75 % is at your marginal tax rates. So the larger your balance the more tax you will pay in one go.

The above at least allows some more flexibility in UK pension options than there is presently at retirement.

The above is just information only.

Cheers John

Swerv-o

Thanks for your input John. this has reminded me that I need to cash out my Teacher Pension sooner rather than later.


S

john in oz

As the above becomes known, there is a higher demand to affect transfers - so you should get things going well before Oct 2014 - if you intend to transfer to ensure you get it across by April 2015.

I expect that the UK pension providers are going to be completely overwhelmed with demands for transfers!!!

cheers John