worzel

"A UK-based pension expert has launched a stinging attack on some Australian financial advisers who are encouraging investors to transfer funds from the UK. The practice has gained prominence in recent months in the lead-up to the July 1 changes to superannuation" More here:

http://www.thewest.com.au/default.as...ontentID=31024

I have to admit I am deliberately sitting on my hands. My defined benefit scheme in particular is going nowhere.

Sleeping Beauty

we've not transferred ours yet, purely for the reason of ignorance i have a mental block when it comes to pensions i'm afraid. however, we would like everything all pooled together for easiness. so, we have sat on our laurels, with the full intention of doing something tomorrow.............. thanks for the information worzel.

migrantoz

Another thing to consider very carefully is the possibility that you one day return to the UK. You then have the hassle of returning your pension/super funds back to the UK. Also, is it really a good idea to have all your eggs in one basket? What if the one fund you put your pension funds into collapses with huge debts?

SJR

Hi

I looked into this a couple of weeks again and decided against transferring. I was confused as to why there are adverts from FA's trying to attract British people to transfer their pensions. I remember going to an emigration seminar in the UK about 3 years ago and a financial adviser did a short talk on this subject. He said that the best situation to be in is building up your pension in the UK and spending it in Australia. I e-mailed a FA a couple of weeks ago and told him that I just couldn't see any benefits in transferring and he agreed. The only benefit he could come up with is that there is more choice and potential for growth with an Australian fund rather than a UK one. My husband has a few years with Standard Life and that has grown very well, we will likely just transfer a couple of smaller ones into that one. It's probably something we will look at again in 20-25 years!!

Sandra

walaj

It should also be noted that he has received some not so complementary comments, in the past on this forum. But then again, I've seen complaints re the shippers we used whom we thought were v good.

So be careful too which FA you go to.

mindblower

As ever, a spot on post Worzel..

Been looking at this recently, what a quagmire of technical data and charges.

It aint easy this...

Dave

worzel

I have come to the conclusion that if I ever do decide to move them I can do it myself. But whether I ever will is another story.

JAJ

If you have come on a permanent visa, it likely will be impossible to return the funds to the UK. Not just hassle - impossible.

And even if you could, your old employer pension scheme is unlikely to allow you back in.

There is also the possibility you may leave Australia and live in a country other than the UK.

Sue from Manchester

Agreed, you should be cautious but I am in the throes of transferring across because, as I understand it, superan taken here on retirement will be tax free whereas pensions paid out in the UK and then transferred here would be subject to tax. My superan fund is doing all the paperwork for me but it's not helped by new UK bureaucracy. Apparently they now have something called a "crystallisation event" - which means the date you retire!

Alan Collett

Everything else being equal, and assuming you are in Australia in your retirement as a permanent resident or citizen of Australia:

- pension fund left in the UK: lump sum which is tax free in the UK is likely to have an exposure to tax in Australia; pension income (annuity) taxable in Australia (subject to a possible tax deduction if PERSONAL pension contributions have been made into the UK fund).

- pension fund transferred to an Australian superannuation fund: tax free lump sum available at retirement age and/or pension income stream available on a tax free basis

In other words, you are potentially looking at tax free funds if pension benefits are transferred to an Australian superannuation fund vs taxable if left in the UK.

That is before you consider the potential for a personal tax liability annually under Australia's Foreign Investment Fund Rules based on the growth in the value of the UK pension fund from one Aussie tax year to the next if you are a tax resident of Australia and retain a UK pension fund that is not an "employer sponsored" fund.

In short, even though many understandably switch off when tax and pensions are discussed I would encourage many (most?) migrants to make an effort to get to grips with the subject.

Best regards.

Alan Collett

Yes, the paperwork attaching to the transfer of pension benefits from the UK to Australia generally isn't too burdensome. The value added advice comes in establishing where your super fund should be invested for your retirement (it should be a QROPS for starters - but which one?).

Best regards.

Alan Collett

Comments as follows:

1. Was the financial advisor registered in the UK or Australia?

2. Was the financial advisor also a competent tax advisor with knowledge of the tax legislation in both countries?

3. The superannuation regime in Australia has undergone significant changes in the last 12 months.

Best regards.

RRZ

Totally agree with the above analysis. I had the Actuarial analysis done and it showed that I was (very) much better of transferring the UK pension to Australia - the major driver was the tax free nature of the income post 60 vs a UK income stream which was fully taxable. I've worked in this area and I agree with the analysis and premises - I also like the fact that, should anything happen to me, then my dependents receive the full amount of the lump sum rather than a greatly reduced part pension.

You shouldn't make assumptions in this area, it's boring but important, so have a professional analysis done. Do the transfer yourself if you want - but here I part company a bit - it can be ugly or easy, depending upon your sending and receiving fund. I've got enough stress already and ducked this one.

JAJ

The only caveat here is that if the UK pension is final salary based, then there's an investment risk if you transfer it.

I would say that if this forum is representative, a significant proportion of migrants do return to the UK. That's another risk to consider.

Those who have multiple UK pensions (eg from changing jobs) may be able to have a mixed strategy : transfer some pensions and leave others behind.

donna

Cant you also choose to take your pension here at 55 as opposed to 65 in the UK,correct me if im wrong.
donna