The Woodcutter

I have a small UK pension which I wish to start collecting in September when I retire. Do I have to pay tax on it in Australia? Should I collect the pension every month or transfer the accumulated funds once a year? And what is the best way to transfer it? Any advice would be greatly received.

rammygirl

Hi
Yes UK pensions are taxed as income here, tax applies when you receive it regardless of transfer to Australia. There are some tax deductions so might be worth checking with an accountant as it can depend on the type of pension, lump sums etc.

You will need to send a form to allow your Uk provider to pay you without deducting tax, available on ATO website.
Most companies will pay into your Aus account direct or you can have it paid into UK bank account then diy via an fx company like wise.

You will also be entitled to a UK gov pension depending on your contributions, this will also be taxed as income by the ATO.

Julian927

I have just received a letter from Barclays saying they are closing our bank account. It is the one bank account we were allowed to keep when emigrating from the uk 13 years ago. Our pensions are paid into it then we use uk forex to transfer when exchange rate is favourable.
We live in Australia. It appears that unless we bank £100,000 or more that’s it!
does anyone have a solution. I’m sure we’re not the only ones to receive this bombshell.

SanDiegogirl

Just had the same done to me. I opened a Wise account and my pension now gets paid into that. Had a bit of an issue with the plan administrators but they have now agreed to use Wise.

Julian927

Thanks for that. How does it work? We have separate amounts of pension (3 between us) that will go in. Do you move it when you want from GBP to AU$. What sort of exchange rate do you get please?

dcw

Just got the same letter. I've been expecting it for a few years. I already have a Wise account so I'll probably try to get it paid into that. They give you a UK Sort Code and BSB number so it should be possible to get money paid into it directly from pensions. Not sure what happens then, presumably it automatically appears in the linked Australian account at whatever the current exchange rate is less charges. I'm pretty sure you can't accumulate money there and transfer much later, which means it wouldn't be possible to wait for a better exchange rate, etc.

All very annoying.

Edit:
Just had a look, and if I've understood correctly, you can keep up to 13k GBP in the account. After that they charge you fees. I'm not sure whether it's a good idea to store much with them for any length of time. I don't think they are a bank, so probably not covered by government bank guarantees.

Please don't take my word for anything as I'm really not sure myself.

Julian927

After getting the letter I’ve opened a Wise account got hold of uk pensions and instructed them to pay our pensions into it. We have sort code and account number for uk and Australia. You move the money from one currency to the other when you want. You can see the exchange rate.
it was all very easy except you can’t open a joint account but uk pensions seem happy to pay into one’s spouses.

dcw

Thanks for that. Seems like the best option. Just hope the pensions cooperate with using the sort code and account number for Wise.

Julian927

yes the pensions people were really helpful. All sorted in less than 24 hours after getting the letter from bl***y Barclays Bank having banked with then for 53 years!!!!

tdrinker

Correct.

Pulaski

You are absolutely correct, and I have posted on precisely this point frequently here on BE - Wise is not a bank, and money in a Wise account is not covered by deposit insurance. A Wise "borderless account" certainly has its uses, but I would caution against keep money in it long term, or using it for more money than you are willing to risk losing.

FWIW Wise's web site deflects the issue of deposit insurance by talking about "segregation of funds", and there is nothing wrong with that (if your solicitor holds money for you it will be in a "segregated account"), but segregation does not provide the same protection as deposit insurance.

rammygirl

Are you sure your Uk pension will not pay into an Australian account? Mine gave me the option and so does the UK aged pension.

I know Barclays has a 100k account for overseas people but I’m shocked they are applying that to existing account holders. I got a letter once for Santander telling me they were closing my account as I had just changed my overseas address. When I rang they allowed me to keep the account. The system had just triggered letters because of the new overseas address. Maybe Barclays did the same. Worth calling and checking

dcw

I'm pretty sure I could redirect pensions directly to my Aussie account, but I'm assuming that there'd be hefty fees at this end & I'm too tight for that . Presumably Wise would be cheaper.

The accompanying letter from Barclays makes it pretty clear that they are deliberately getting shot of their overseas customers, so I think I'd rather just move on. I had a chat with Wise today and it looks like their services cover pretty much everything I need including taking my pension receipts, holding sterling up to 13k GBP, using it to pay any bills in the UK (such as HMRC), and providing a multi currency debit card.

Kiwipaul

I've had a Barclays a/c for 50 years (last 30 abroad Oz)and I only have 5,000 pound in it and I've received nothing about them closing it.

Kiwipaul

I've only got 1 UK pension which gets paid into my Oz bank a/c monthly. I end up with appox $1200 (varies due to exchange rate) and it costs about $20 / month which I think is reasonable. I could open an a/c in pounds here and get it transferred in pounds but their would still be a transfer charge and so I don't think it's worthwhile. With 3 a/c's it's more difficult because you would be hit with 3 transfer charges.