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Planning for retirement/topping up UK state pension

Planning for retirement/topping up UK state pension

Old Sep 18th 2019, 1:51 pm
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Default Re: Planning for retirement/topping up UK state pension

Originally Posted by freebo View Post
I haven't really looked at the Aus one as I don't think I'll get it due to the means test, which is absolutely fair enough and if it pans out that way I'm fortunate. It's still a lot of years to go though, in the meantime I'll keep on top of super and other investments.

The UK one may be less but its not means tested so a nice $32k pa top up on the super, hence me saying it seems worth filling in the NI gaps. I think if you get the full amount for both it adds up to about $55k per year as a couple, from age 67, all figures in todays money of course.
At todays figures your entitled as a couple to 1407 dollars combined per fortnight, (36,800 per annum) with the cut off figure on the assets test where you receive no pension being 860,000 AUD on top of ones house. If you are under that figures you will get some Australian Pension.... or more importantly that seniors card. Interestingly you can also earn 36,000 AUD combined tax free on top of that amount, how that equates to the UK pension is an intersting point.... .hence chat to Centerlink for clarification.


Also it looks like one qualifies for the full Australian aged pension with just 10 years of permanent residency.

I dont understand why people are paying top up figures on the UK pension if it is frozen when living in Australia? I must be missing something.... maybe it's the assets test. Although the assets limits change every year and that frozen amount stays every year so maybe not. That assets test figure for a couple in GBP is 472,000 pounds on top of ones house..... If one doesnt own a house that figure is 590,000 GBP when a couple stops receiving the Aus Pension.

Here are the residency requirements for the Aus Government Pension.
  1. You must be an Australian resident and physically present in Australia on the day you submit your claim,
  2. You must have lived in Australia for at least 10 years, and
  3. Of those 10 years that you've lived in Australia, there should be at least 1 period where you have lived in Australia continuously for 5 years.





A thought occurs, surely for some it has to be worth looking at the benefits of "Upsizing" to a more expensive Australian primary residence as that could bring people in under the assets test, as the house is exempt from the assets test and negate the frozen part of the UK pension. Especially if one is close to those assets tests limits.

Last edited by ozzieeagle; Sep 18th 2019 at 2:02 pm.
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Old Sep 19th 2019, 1:04 am
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Default Re: Planning for retirement/topping up UK state pension

There is also an income test and *hopefully* my super income will be above the means test, also remember your super balance is included in the asset test. Because of this I'm projected to get little/no Aus state pension.

The reason I'm topping up my UK pension is I will be in profit in under 4 years, i.e. cost to top up is made up by increased payments and pays it off quickly.

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Old Sep 19th 2019, 7:55 am
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Default Re: Planning for retirement/topping up UK state pension

Originally Posted by freebo View Post
There is also an income test and *hopefully* my super income will be above the means test, also remember your super balance is included in the asset test. Because of this I'm projected to get little/no Aus state pension.

The reason I'm topping up my UK pension is I will be in profit in under 4 years, i.e. cost to top up is made up by increased payments and pays it off quickly.

The thing to do apparently is to come in as close to the assets test limit as possible..... so say 750K worth of super combined the rest in assets and just under that 860K figure. Reason being that Seniors Health Card is worth a lot more than people realise. It's not so much the Aus Pension thats valuable, it's the lifestyle at that cusp of the end of the assets test that one gets. To be properly self funded and have no inclination to worry about the means test one would need at least 1.5 million in assets as far as I'm concerned, including super that is. If your under that, then people should look at trying to arrange themselves finding a way to qualify for the Aus Pension at the top end of the scale.

Reason I say 1.5 Million is the 75K in income one should earn from the guaranteed 5pct interest (Challenger accounts etc). Which is about the same income one would get at the higher end of the 860K assets limit scale, with the 10 pct minimum draw down.plus the pension and other benefits one gets. It's a lot more complicated than it looks and people really need to talk to experts in the feild. It gets even more complicated if one factors in potential downsizing as the super balance diminishes.

Everyone's circumstance is different, mine is complicated by the fact that my wife although only 30 months younger than me, doesnt reach the Aus Pension age until at least 50 months after me.

Hence I've got to shift super around into a spouse account, which means I get more Aus Pension.... .Then she can only earn 36K per annum during that period, between my Pensionable age and hers..... Although our joint income will be around the 100K mark take home, and that includes getting some Australian Government Pension.




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Old Sep 20th 2019, 12:31 am
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Default Re: Planning for retirement/topping up UK state pension

Originally Posted by ozzieeagle View Post
The thing to do apparently is to come in as close to the assets test limit as possible..... so say 750K worth of super combined the rest in assets and just under that 860K figure
.
Curious where you get those asset figures from? This suggests only $394.5k for a couple.

https://www.humanservices.gov.au/ind...setstestlimits
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Old Sep 20th 2019, 12:37 am
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Default Re: Planning for retirement/topping up UK state pension

Originally Posted by ozzieeagle View Post

I dont understand why people are paying top up figures on the UK pension if it is frozen when living in Australia? I must be missing something....
Anyone with any intention of going home should be topping up the UK one - much cheaper to do from over here
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Old Sep 20th 2019, 3:36 am
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Default Re: Planning for retirement/topping up UK state pension

Originally Posted by freebo View Post
Curious where you get those asset figures from? This suggests only $394.5k for a couple.

https://www.humanservices.gov.au/ind...setstestlimits
$394.5k is the total amount of assets you can have before the Age Pension starts reducing.
$863.5k is the total amount of assets you can have before the Age Pension cuts out completely.

If your assets total is between those amounts you can get a part pension (assuming you pass the income test as well, of course). People on part pensions still get the Concession Card which is worth having.
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Old Sep 20th 2019, 4:27 am
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Default Re: Planning for retirement/topping up UK state pension

Originally Posted by ozzieeagle View Post

Reason I say 1.5 Million is the 75K in income one should earn from the guaranteed 5pct interest (Challenger accounts etc)

Hi Ozzie, can you let me know (via PM if preferred) where I can get anything close to a 5% return on a term investment. All I can find is a fraction over 2%, which is very piss-offery! Ta

ps I'm old enough to remember the days off 10% interest on term investments
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Old Sep 20th 2019, 5:47 am
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Default Re: Planning for retirement/topping up UK state pension

Originally Posted by spouse of scouse View Post
Hi Ozzie, can you let me know (via PM if preferred) where I can get anything close to a 5% return on a term investment. All I can find is a fraction over 2%, which is very piss-offery! Ta

ps I'm old enough to remember the days off 10% interest on term investments
I was thinking more about the Challenger rates and their Ilk to be honest. The figures quoted are for every 100K invested.

https://www.challenger.com.au/personal/products/payment-rates/lifetime-annuity-payment-rates, or ha

Also Host Plus index linked Super and they have a lot of varied options....pays a very high rate and has done for years. Not sure you can get into those, once you have both left the workforce, but you can open spouse accounts if only one is working. They work on minimum 10pct drawdown AFAIK..... Generally speaking that keeps your whole balance intact or has done for decades uptil this point.

So Annunities and flexible super.....

A lot of people around here, and there are dozens of outlets dedicated to it, is buy gold bullion. Coburg has to be the Gold Bullion center of Melbourne. I think our middle eastern people are onto something with those. There are literally 10 outlets in our small shopping strip, then a lot more along the whole of Sydney road.... and they are always crowded. There has to be something in that, that I've not explored properly yet.
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Old Sep 20th 2019, 5:48 am
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Default Re: Planning for retirement/topping up UK state pension

Originally Posted by ozzieeagle View Post
The thing to do apparently is to come in as close to the assets test limit as possible..... so say 750K worth of super combined the rest in assets and just under that 860K figure. Reason being that Seniors Health Card is worth a lot more than people realise. It's not so much the Aus Pension thats valuable, it's the lifestyle at that cusp of the end of the assets test that one gets. To be properly self funded and have no inclination to worry about the means test one would need at least 1.5 million in assets as far as I'm concerned, including super that is. If your under that, then people should look at trying to arrange themselves finding a way to qualify for the Aus Pension at the top end of the scale.

Reason I say 1.5 Million is the 75K in income one should earn from the guaranteed 5pct interest (Challenger accounts etc). Which is about the same income one would get at the higher end of the 860K assets limit scale, with the 10 pct minimum draw down.plus the pension and other benefits one gets. It's a lot more complicated than it looks and people really need to talk to experts in the feild. It gets even more complicated if one factors in potential downsizing as the super balance diminishes.

Everyone's circumstance is different, mine is complicated by the fact that my wife although only 30 months younger than me, doesnt reach the Aus Pension age until at least 50 months after me.

Hence I've got to shift super around into a spouse account, which means I get more Aus Pension.... .Then she can only earn 36K per annum during that period, between my Pensionable age and hers..... Although our joint income will be around the 100K mark take home, and that includes getting some Australian Government Pension.




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Old Sep 20th 2019, 6:32 am
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Default Re: Planning for retirement/topping up UK state pension

Originally Posted by ozzieeagle View Post

A lot of people around here, and there are dozens of outlets dedicated to it, is buy gold bullion. Coburg has to be the Gold Bullion center of Melbourne. I think our middle eastern people are onto something with those. There are literally 10 outlets in our small shopping strip, then a lot more along the whole of Sydney road.... and they are always crowded. There has to be something in that, that I've not explored properly yet.
For what reason? Obviously there is no dividend, however they may be speculating on price appreciation.

Of course it could be an alternative to "cash under the mattress" too...
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Old Sep 21st 2019, 7:22 am
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Default Re: Planning for retirement/topping up UK state pension

Originally Posted by Pollyana View Post
Anyone with any intention of going home should be topping up the UK one - much cheaper to do from over here
Yes would agree with that. Conversely anyone not returning probably should steer well clear of any top up, taking the frozen pension into consideration. Probably the last thing people should do. Especially when the base Aus Government pension is 150 bucks a week higher.

Last edited by ozzieeagle; Sep 21st 2019 at 7:57 am.
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Old Sep 21st 2019, 7:59 am
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Default Re: Planning for retirement/topping up UK state pension

Originally Posted by freebo View Post
For what reason? Obviously there is no dividend, however they may be speculating on price appreciation.

Of course it could be an alternative to "cash under the mattress" too...
Yes I think it's the second point, where one wants to hide from things like the means test and be assured of long term growth. Plus it's very easy to liquidise, in fact it's pure liquidity really.

Plus a lot of those of Meditteranean background seem to distrust insitutions.

Last edited by ozzieeagle; Sep 21st 2019 at 8:11 am.
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Old Sep 21st 2019, 8:07 am
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Default Re: Planning for retirement/topping up UK state pension

Originally Posted by NickyC View Post
$394.5k is the total amount of assets you can have before the Age Pension starts reducing.
$863.5k is the total amount of assets you can have before the Age Pension cuts out completely.

If your assets total is between those amounts you can get a part pension (assuming you pass the income test as well, of course). People on part pensions still get the Concession Card which is worth having.
Yes combine that with the fact that you can dip into ones super, (withdraw lumpsums etc) thus reducing your assets as you wish equates to a lot of flexbility on how one approaches the Pension System in Australia.

Hence even more reason to seek professional guidance.

Do people actually upsize into more expensive property later in life to get onto the Aus Government pension scheme, thus reducing their testable assets.... I can see a case for it.

Here's an article well worth reading Freebo


https://www.goldsborough.com.au/enew...ce-the-impact/

Last edited by ozzieeagle; Sep 21st 2019 at 9:07 am.
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Old Sep 21st 2019, 9:28 am
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Default Re: Planning for retirement/topping up UK state pension

For those having trouble understanding the assets tests limits and income limits for the Australian Gonvernment Pension..... Here is a calculator that sheds a pretty clear light on the situation.

Invaluable actually.

https://www.noelwhittaker.com.au/res...on-calculator/
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Old Dec 15th 2019, 11:56 am
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Default Re: Planning for retirement/topping up UK state pension

Because I've got a lot of time on my hands now I'm retired, I've just worked out the cut off figure as in assets and income as to when you become worse off in Australia on the Australian Pension v the UK Pension. It's quite a surprise I would think for most.

Given that the average Pension for Men in the UK is 143 GBP per week and for Women 151 GBP according to government figures. I used a pension calculator to see when the Australian Pension which is a much higher figure than the UK figure, falls to those UK levels given the effect of the Australian assets test

So for the figure to fall to 1130 AUD Per Fortnight which is that average above converted from GBP for a couple of 586 GBP per fortnight. The Australian base pension is 1700 AUD per fortnight for a couple.

The Assets one would have to have to fall to that UK figure is 480,000 AUD/246,00 GBP (combined per couple) over and above ones home and you can also work and earn 780 AUD/400 GBP (Combined per couple ) per fortnight to have the assets test fall to the level of the "Average" government UK pension.

Make of that what you will.
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