robowen

I wondered what everyone else had planned for their private pensions ?
Have you transfered funds straight away or are you going to leave it a couple of years till you decide if you can settle ?

Does anyone know how the state pension system works over there ? do we still get state pensions ?
Private pensions are straight forward, but can we transfer funds from our state pension...are we allowed to do that ?
Rob

Shaun&Dee

I am going to leave all mine (SERPS & Private) in the UK. You would probably lose value (exchange rates & pension commissions) when changing over to Oz pensions, and also if you ever come back to the UK you would need to change over again. Then maybe after 10 years or so in Oz I would then consider changing over.

supersonic4

We are putting ours in a fund in australia bcause John get get his when he is 55 in a lump sum,and if he dies I get the full amount in a lump sum too,or it goes to his estate if he doesnt sign it over to me.no fee to tranfer it here or to join Australian fund.Just make sure the fund is QROPS rated!
lorri
PS you can't just swap it back to the UK either once you are a resident of Australia

JAJ

http://www.centrelink.gov.au

The Australian age pension is means tested but available after 10 years residence.

You might still be eligible for a part pension from the UK, however under current law it will not be indexed in payment.

You should investigate the tax implications of keeping private pensions in the UK.

Bix

Hi Rob.

New QROPS rules came into force on 6 April 2006 in the UK.
It stands for Qualifying Recognised Overseas Pension Schemes.

Basically overseas funds have to register with the UK government and meet certain criteria. It was slow to start with but there are now numerous Super funds registered. You can check the list here........
http://www.hmrc.gov.uk/PENSIONSCHEMES/qrops-list.htm

You can transfer your pension to a QROPS fund with no (UK) penalty. If it is not a QROPS registered fund then the UK government will take 40% tax on the total transferred amount.

It could be taxable in Australia but it is only the growth that is taxed. Growth of the pension from the time you became tax resident to the time you transfer. I believe the rate is 15%. However if you transfer in the first year or two the likelihood is that your UK pension would not have grown massively so the tax figure would be very small.

I cannot advise you on whether your pension is worth transferring or not or to which Super to use. I can only tell you what I did.

I had a final salary scheme pension that had been running for 20 years. The advice you will see is never to transfer such a pension as it is guaranteed. I baulked this and did transfer mine just before the new QROPS rules came into force.

Why ? Because the company had been playing silly buggers for a while and started to dilute the fund. It was effectively a non viable fund because they had taken long periods of holiday in the past where they paid nothing into it. Just wanted it to perform to the minimum they could legally get away with but that backfired when the bad years came along of very low investment returns.
I did not trust them any more.
The Australian Super schemes are lightyears ahead of the UK and close behind Singapore who are regarded as having the best in the world.

If I kicked the bucket the UK scheme would "generously" pay my wife one third of my pension value as a pension. If she died the money would be "lost".
In Aus she gets 100% and the money is always yours or your families to inherit.

What you can do with the money invested is your decision - not some UK "old boys" trustees. You can decide where it is invested, the type of investment and at what type of risk level.

You can do more with the money like drawing on the fund to buy an investment property which pays the rent back into the fund.

There are other flexibilities in the Aus Super system that I haven't got my head around yet but I do not believe they are available in the UK. Another one is salary sacrificing directly into the Super for tax reasons.

When I transferred my pension I paid no 15% Aus tax because my UK pension growth was zero'
I think you get the picture that I like the Super over here.....it's super

The UK State pension is frozen at the time you emigrate. No inflation increases. You can continue paying your stamp but it is not something I am doing as I can get a bigger return for that money in Aus.
I am not at ease with the UK State pension which I think at minimum will become means tested in the not too distant future.

It's 10 years in Aus to qualify for a State pension and it is means tested.

As repeat I am no expert but I would advise that you wait until you get to Aus before seeking financial advice on pensions. It will be cheaper here and there are far more experts to choose from because Aus has so many immigrants so they are dealing with it more often. When you select a Super fund over here you may well be able to get them to arrange everything for you. There might be a fee but very competitive with anything in the UK. I did not pay any fee.

Good luck with your decision.

jackie barden

Hi Bix,
Out of curiosity, who did you go with to not pay a fee?? Sorting pensions out is my biggest problem at the moment, I was going to try and start sorting it out, but may wait until June when we arrive in Queensland.Thanks, J and J

Willij

Hello Bix,

Thanks fo that reply - very interesting. Must agree with you on differences between UK and Australian funds - the latter seem light years ahead.

Bix

When I came here I just went with my company scheme which was with AMP.

I compared the fund to a similar one by Sun. There was no real difference on the annual return except that the AMP managment fees were higher. The reason is my AMP fund includes "free" financial advice which come out of the management fees of course. Whereas with Sun you would pay as you go for any change - so don't sneeze.

I still used the high fees as a bargaining tool when talking about transferring my pension and they agreed to do it for nothing.

Advantage for them of course is that they now have a sizeable pension fund from me as it was a 20 year UK pension.

Some time soon I want to investigate a PPF = Personal Pension Fund.
I haven't got a massive fund but maybe enough to do this. I am not comfortable with stocks and shares but could invest in property.

Not looked into it properly but understand I could use my Super funds to buy a property. The PPF owns the property and the rent raised is paid into the PPF after deductions for maintenance and running cost. The theory is the rental is income to the fund and the value of the property increases over time.

jackie barden

Thanks for that Bix. Its difficult to know what to do, especially as these pension years are not too far away, cheers, Jackie

Dinky

Alos think of the tax implications on the way out as well as the way in to super funds. When you hit 60 in Australia you can access your superfunds tax free (within limits).

D

biggy

hey Bixie how ya doin babe? Did you get AMP to deal with the transfer of your UK pension into theirs? Hubby is with NU in the UK and when he asked how he can transfer his private pension they sent us out a Transfer Value Quotation which is utter shite...and we were wondering if they were at it!!!!

Bix

Very well thanks H.

Yes, AMP did ecerything.
I just gave them any papers I had on my pension and they did the rest.
Contacted the UK fund, checked values and set it all up.
I just signed all the paperwork.

biggy

thanks for the info mate.......I take it you were happy with the transfer amount...ours just seems totally shite

Bix

Yep, it was more than I was expecting.