ScouseMan

Hi all,

after 15 months in Brisbane on a 457 we are returning to the UK. As temporary residents we have to take our super with us (minus tax), and considering using the money to either:
(A) - Reinvest into UK pensions
(B) - Put towards a deposit for a house

My OH has an NHS pension with 3 years service, I have no current pension in the UK as my job in Aus was my first out of uni, but I will be setting up a private pension with my new employer upon my return.

Assuming a 40% tax and current exchange rate our combined pension refund will be around £12K. A larger deposit means a smaller mortgage, less interest and us paying the mortgage off sooner; but at the expense of a year or two in the pension.

I appreciate you are not financial planners but any advice you can offer would be appreciated. Buying a home, pensions, its all so grown up and i'm trying to get a feel for things before I approach the pensions/banks.

Thanks!
Anthony

quoll

Very sensible of you to be questioning and even contemplating pensions!! Personally Id go with getting a foot on the property ladder but I am old fashioned and see rent as wasted money, not everyone does of course. You might still be in time before the property market heads up again as it is showing signs of doing. Could be a good move!

Tramps_mate

I slipped up in April by not moving the rest of my $ back to £. It's been free falling since. I'm not gonna be moving it for a while now. Unless it picks up a bit soon. I've got five figures to shift still.

Have you had your 457 cancelled yet? There's currently a 2.5 month waiting list as I've found out!

Then once super is claimed do a tax return! Hopefully get some more back too!

Bermudashorts

I sometimes think people are short termist when they want to cash in their pensions. But for 15 months contributions, I would be inclined to think take the cash and put it into your property.

quoll

Don't really have a choice when you're on a 457 though - they tell you to take it!

Sarah7263

I have been wondering about the same thing (we are also temporary 457 visa holders) .....
We aren't heading back to the UK just yet but I think when we do we will use the Super towards a deposit for our first house in the UK. My Dad always drums into me how important a pension is which I agree with but it's tough to get on the housing ladder anyway plus I kind of figured that we could well be working till we are 70 so there will be time to make up some additional contributions. I have a small ish pension pot from my previous job in the UK but my other half doesn't so we would be in a similar position to you. I'm no financial expert but I think that would be my plan!

Good luck with the move back

Beoz

Personally I'd go with the property. Even if you have no money in your old age at least you have a roof over your head.

My parents lost most of their pension in 2008 (they thought it was a safe bet until the markets hit the wall). But they had paid off their house many years before so even if it was a matter of us children putting food in their mouths, at least we didn't have to house them.

ScouseMan

Thanks all, I appreciate the feedback.

The general consensus is to put the pension payout it into a property, rather than buy extra time in a UK pension. That is my feeling also, I did a quick calculation on the BBC mortgage calculator:

Assuming 10% interest, 25 year repayment - the difference in interest between a 200K mortgage and a 188K mortgage is 33,000 GBP (No pound sign on Aussy work keyboard ). Basically to get ahead a pension fund would have to outperform a big bank at making a profit

ScouseMan

Thanks for the timeline Tramps-mate, I had hoped to have things in order in less time than that so its good to know. Crazy, my visa was granted in 6 days in 2012, now 2.5 months to cancel it

ScouseMan

[QUOTE=quoll;10896109]Very sensible of you to be questioning and even contemplating pensions!!

Ha, I'm glad you didn't overhear our original conversations about buying a car with it Thankfully common sense won out, thanks for your post.