sportsendurance

Hi,
I'm just wondering whether anyone can offer advice on whether it would be in my best interest to transfer my 15 years of English teacher pension across to Australia where I expect to teach for a further 15 years or so. I understand that it must be transferred within 6 months of me living here otherwise I could be taxed on it! Would I for instance receive a better rate over here (Aus) for what has been built up or should it remain in the UK until I finally retire and then draw on it as anyone else might do?

JAJ

If you wait more than 6 months, the notional growth might be taxed at 15% (as far as I understand) which is the normal tax rate for superannuation in Australia.

If you transfer:

- you are trading a fixed benefit for something that will depend on investment returns; and

- you cannot later on transfer it back to the UK (or anywhere else).

If it's a good employer plan in the UK, it might be better to leave it where it is.

sportsendurance

Thanks JAJ,
Does this mean that if I transfer my pension now and assuming we decide to return to the UK and I retire in 15 years time, would both my pensions just be directed into my Aussie bank account for which I would then need to do a bank transfer over to my UK account? If you follow what I mean!!

NKSK version 2

I've been investigating this.
I have 8 years which I think currently equates to about 2300 GBP per year based on my final salary. Transfer value is about 50000GBP.

IF exchange rates improve then I'm going to transfer mine. Even at $100K - i.e. without any investment growth and at roughly 2:1 exchange rate - this would give me 25 years of $4000 a year - meaning I'd be 85 when it runs out.
With growth - of which I'm sure there will be some(!) I think it makes sense to bring it over.

The only complicating fator - which you've raised - is where you'll be at retirement age. I can't see myself hobbling along the rainy streets of the UK somehow so it's likely that i won't be there.

Swerv-o

I have been looking at this too. I have just under two years of Teacher Pension - so little in fact, that it doesn't even qualify for benefits unless I work another 3-4 months I think.

I can't decide whether to transfer it using formal channels, or liquidate it into cash and take the tax/NI hit via repayment of contributions (an option you have if you don't qualify for benefits by virtue of 2 years service). I don't think it will equate to very much - possibly UKP500 at most. Still, that's an extra $1k I could add to my super or place in my mortgage offset account.


S

NKSK version 2

Don't think you can do this. It has to go to an "approved pension provider" or some such.

Swerv-o

That would be if I decided to request a return of contributions and get a cash lump sum instead of a transfer.

If you have less than two years qualifying service, you can request to have your contributions repaid, minus some tax and NI contributions of course.

I need to do the sums and see whether it will be likely to generate more left where it is, increasing at the CPI rate, transfer it directly into my Super, or take the cash and run. Sometimes, I think that choices and options make things much more complex!


S

sportsendurance

Hang on boys, I think I've become both dumb and confused!!
Liquidising your pension? Are you saying that I can cash my teachers pension in (15 years service) so that I have a lump sum to spend over here? If true that could be useful as I have a house which I'm renting out in the UK and could be used as my pension at a later date. The cashed in pension could contribute towards a deposit for a house over here!
Am I just getting carried away here boys?

Swerv-o

Yes, sadly you are

If you have less than two years pensionable service, i.e. haven't qualified for benefits, then one of the options open to you is to request a refund of contributions. If you have qualified for benefits with more than two years service, then you can either transfer your pension or leave it where it is.

Sorry to be the bringer of bad news, but I haven't yet qualified for benefits, and as I am now working in a completely different industry, probably never will. So I am wondering if I should transfer what is there, or get a refund on the contributions.


S

coolerkingcooler

I decided to take the plunge, I enlisted a financial adviser who managed to track down both my pensions. I had one with British Gas (but had been transfered) and also eleven years of teaching.

Unless it's under two years, you will be obliged to transfer to a 'similar' scheme. You only pay the tax on the growth after the period starting from six months in the country.

I'm 45 and I am retiring at 60 irrespective of when I can get my pension. My wife is ten years younger than me and retraining for a different career so she is part of my investments - I do love her of course

The two former colleagues who have moved to Perth and NZ have not looked at their pensions, I suspect this is the norm.

As mentioned, the options make it seem hard but I've decided that I'll plunge it in here

Cooler