Planning for retirement/topping up UK state pension
#16
Re: Planning for retirement/topping up UK state pension
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.
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.
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.
- You must be an Australian resident and physically present in Australia on the day you submit your claim,
- You must have lived in Australia for at least 10 years, and
- 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 1:02 pm.
#17
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.
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.
Last edited by freebo; Sep 19th 2019 at 12:10 am.
#18
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.
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.
.
#19
Re: Planning for retirement/topping up UK state pension
https://www.humanservices.gov.au/ind...setstestlimits
#20
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Re: Planning for retirement/topping up UK state pension
Anyone with any intention of going home should be topping up the UK one - much cheaper to do from over here
#21
Re: Planning for retirement/topping up UK state pension
Curious where you get those asset figures from? This suggests only $394.5k for a couple.
https://www.humanservices.gov.au/ind...setstestlimits
https://www.humanservices.gov.au/ind...setstestlimits
$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.
#22
Re: Planning for retirement/topping up UK state pension
ps I'm old enough to remember the days off 10% interest on term investments
#23
Re: Planning for retirement/topping up UK state pension
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
ps I'm old enough to remember the days off 10% interest on term investments
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.
#24
Re: Planning for retirement/topping up UK state pension
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.
.
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.
.
Boom! Capitalism is a wonderful thing
#25
Re: Planning for retirement/topping up UK state pension
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.
Of course it could be an alternative to "cash under the mattress" too...
#26
Re: Planning for retirement/topping up UK state pension
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 6:57 am.
#27
Re: Planning for retirement/topping up UK state pension
Plus a lot of those of Meditteranean background seem to distrust insitutions.
Last edited by ozzieeagle; Sep 21st 2019 at 7:11 am.
#28
Re: Planning for retirement/topping up UK state pension
$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.
$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.
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 8:07 am.
#29
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/
Invaluable actually.
https://www.noelwhittaker.com.au/res...on-calculator/
#30
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.
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.