Retirement - standard of living

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Old Feb 11th 2018, 10:42 am
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Default Retirement - standard of living

We're thinking of retiring to Oz. I'm applying for permanent residency, husband is Australian and children have citizenship by descent.

We will be purchasing a property in Sydney at a similar cost to ours in the UK (expensive!) so won't have a vast amount of savings to take with us. The cost of living seems generally much higher particularly groceries. Transport seems lower although we have free travel here. We will have income from a second property which will double as a base in the UK.

Any thoughts on how difficult or otherwise it will be to maintain a good standard of living? Our workplace pensions will be liveable here but are probably lower than in Australia.

I'm not sure if we or at least my husband would be eligible for an Australian age pension but as far as I can see the disadvantage of this is that it would be index-linked.
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Old Feb 11th 2018, 10:49 am
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Default Re: Retirement - standard of living

Originally Posted by fal View Post
We're thinking of retiring to Oz. I'm applying for permanent residency, husband is Australian and children have citizenship by descent.

We will be purchasing a property in Sydney at a similar cost to ours in the UK (expensive!) so won't have a vast amount of savings to take with us. The cost of living seems generally much higher particularly groceries. Transport seems lower although we have free travel here. We will have income from a second property which will double as a base in the UK.

Any thoughts on how difficult or otherwise it will be to maintain a good standard of living? Our workplace pensions will be liveable here but are probably lower than in Australia.

I'm not sure if we or at least my husband would be eligible for an Australian age pension but as far as I can see the disadvantage of this is that it would be index-linked.
Don't know about index linked, but the Aus pension is means tested, so they take into account your UK State pension and private pensions/superannuation. UK State Pension will be frozen at the rate at which you access it, no index linked rises on that.
If you haven't worked here you almost certainly wouldn't be anyway eligible, but the Centrelink website is the place to check.
Medical costs may be higher too, Medicare has far less available free at point-of-use than the NHS does.
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Old Feb 11th 2018, 11:02 am
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Default Re: Retirement - standard of living

Originally Posted by Pollyana View Post
Don't know about index linked, but the Aus pension is means tested, so they take into account your UK State pension and private pensions/superannuation. UK State Pension will be frozen at the rate at which you access it, no index linked rises on that.
If you haven't worked here you almost certainly wouldn't be anyway eligible, but the Centrelink website is the place to check.
Medical costs may be higher too, Medicare has far less available free at point-of-use than the NHS does.
Sorry I should have said "means tested". I worked there for 7 years many years ago and husband for longer. I don't know whether that would still count and I could work another three years to become eligible and if so whether this would need to happen before the age of 65.

Probably the only advantage to the Oz pension is that it wouldn't be frozen. That's something I need to investigate what determines emigrating for the purposes of it becoming frozen because that definitely isn't an option.

I know Medicare isn't completely free like the NHS and ideally needs topping up privately.

It would be good to have a "retirement" thread on here to hear peoples' experiences.
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Old Feb 11th 2018, 11:53 am
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Default Re: Retirement - standard of living

In addition to the income and assets tests, the aged pension has the following residence criteria, hope it helps a bit with your planning.

From 1 July 2018, to receive Age Pension or Disability Support Pension (DSP), a person will need to have:

10 continuous years of Australian residence including at least five years during their Australian working life, or
10 continuous years of Australian residence and proof they have not received activity tested income support for cumulative periods of five years or more, or
15 years of continuous Australian residence.
Residence during a person’s working life is the number of years a person has resided (lived permanently) in Australia between age 16 and age pension age.
https://www.humanservices.gov.au/org...nts-pensioners
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Old Feb 11th 2018, 12:29 pm
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Default Re: Retirement - standard of living

Originally Posted by fal View Post
Sorry I should have said "means tested". I worked there for 7 years many years ago and husband for longer. I don't know whether that would still count and I could work another three years to become eligible and if so whether this would need to happen before the age of 65.

Probably the only advantage to the Oz pension is that it wouldn't be frozen. That's something I need to investigate what determines emigrating for the purposes of it becoming frozen because that definitely isn't an option.

I know Medicare isn't completely free like the NHS and ideally needs topping up privately.

It would be good to have a "retirement" thread on here to hear peoples' experiences.
The Aus pension isn't frozen, but you would only get it if you meet the criteria SoS posted, AND still are under the level set by means testing - that level takes your UK State pension and private pensions into account. I'm far from expert on it, but I've been advised that with a full UK State pension and a basic level of super, I will not qualify for any Aus pension, because I wll fail the means test, regardless of meeting the residence criteria.

Years ago we did have a very active thread for holders of parent visas, most of whom were retirees, but the forum just isn't active enough to support it now
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Old Feb 11th 2018, 7:06 pm
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Default Re: Retirement - standard of living

You’re unlikely to get an Australian age pension, remember, it’s not the same as the UK pension - it’s a means tested benefit and with your U.K. pensions and investment property income you’re going to struggle to get under the theshold and you’re going to have to wait years anyway. As pensioners we are mortgage free and with a bit of renovation, solar hot water, scavenged wood heating, 2 cars and not too many expensive vices, our credit card bill (which got paid off each month) was around the $5k mark - and that was before we left in 2011 so I can’t imagine it’s gone down much in the interim. We are going back for a holiday in April so I will ge5 a better idea then.
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Old Feb 11th 2018, 9:13 pm
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Default Re: Retirement - standard of living

My husband and I are retired and live in the eastern suburbs of Sydney. I log all our expenses and I know down to the last cent how much we spend, and what we spend it on.

We own our house so no mortgage and we run one car. As retirees we can travel anywhere on the Sydney region public transport network (from Newcastle to Nowra) for $2.50 a day so we use it as often as possible. We have private health insurance and regard ourselves as being financially comfortable. We eat and drink what we like, and we don’t stint on anything.

Our monthly living expenses right now are approximately $4000. Or around $900 a week. So quite a bit less than Quoll was paying 6 years ago. My figures do not include holidays but do include everything else - food, drink, entertainment, all bills, car expenses, insurance premiums, clothing etc. :-)
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Old Feb 12th 2018, 3:24 pm
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Originally Posted by NickyC View Post
My husband and I are retired and live in the eastern suburbs of Sydney. I log all our expenses and I know down to the last cent how much we spend, and what we spend it on.

We own our house so no mortgage and we run one car. As retirees we can travel anywhere on the Sydney region public transport network (from Newcastle to Nowra) for $2.50 a day so we use it as often as possible. We have private health insurance and regard ourselves as being financially comfortable. We eat and drink what we like, and we don’t stint on anything.

Our monthly living expenses right now are approximately $4000. Or around $900 a week. So quite a bit less than Quoll was paying 6 years ago. My figures do not include holidays but do include everything else - food, drink, entertainment, all bills, car expenses, insurance premiums, clothing etc. :-)
Mine included holidays and we were in mid diy phase so probably on a par.
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Old Feb 12th 2018, 3:28 pm
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Default Re: Retirement - standard of living

Thanks for the replies. Surely if you become eligible to claim the Aus age pension you have to renounce your UK state pension? I can't seem to find the existing pension requirements, what has changed?

We'd like to find a property in the eastern suburbs but won't find anything under $2m so will probably look to the north shore/northern suburbs. The lowered Brexit exchange rate has spoilt things somewhat.

It's good to hear how much it's possible to live on and although transport isn't free for retirees it's definitely affordable. Is there anything that's actually cheaper than the UK other than petrol?
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Old Feb 12th 2018, 3:58 pm
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Default Re: Retirement - standard of living

Originally Posted by quoll View Post
You’re unlikely to get an Australian age pension, remember, it’s not the same as the UK pension - it’s a means tested benefit and with your U.K. pensions and investment property income you’re going to struggle to get under the theshold and you’re going to have to wait years anyway. As pensioners we are mortgage free and with a bit of renovation, solar hot water, scavenged wood heating, 2 cars and not too many expensive vices, our credit card bill (which got paid off each month) was around the $5k mark - and that was before we left in 2011 so I can’t imagine it’s gone down much in the interim. We are going back for a holiday in April so I will ge5 a better idea then.
Good point. Not sure how it is now, but wasn't pensioner poverty always a huge problem in Australia. I remember it being rated one of the worst places to grow old in (pension vs cost of living in developed countries). Of course with $2m in your pocket, that's not a problem. You could probably buy a small greek island with that sort of money.

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Old Feb 12th 2018, 5:08 pm
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Default Re: Retirement - standard of living

Surely it can't be worse than the UK who apparently get the worst state pensions in the western world. The only advantage is that it's not means tested.

I can imagine it would be very hard to live on the age pension in Sydney particularly. $2m sounds great but not if we want to buy a small home in the near Sydney suburbs! Units aren't an option as I don't want to be committed to the high strata fees.
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Old Feb 12th 2018, 5:43 pm
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Default Re: Retirement - standard of living

Originally Posted by fal View Post
Thanks for the replies. Surely if you become eligible to claim the Aus age pension you have to renounce your UK state pension? I can't seem to find the existing pension requirements, what has changed?
The only effect any UK basic state pension has on your eligibility for an Australian age pension is the amount of the UK pension is counted in the income test. I don't think it's possible to give up a UK state pension, but even if it were and you did that, the Australian government would still assess your income as though you received it, it's termed 'intentional deprivation', or in lay language, giving something up/away in order to gain an advantage.

Your UK State pension is frozen when you move to Australia, ie you won't receive any increases.

For the Australian age pension, any assets held overseas (including the UK) form part of the assets test, and all your worldwide income is included in the income test.

As well as any UK state pension received, your workplace pensions and rental income from the UK would also form part of the income test for an Australia aged pension, and cash/bank savings in either country, money invested etc are included in the assets test.

As you'll have a financial foothold in both countries, you really do need professional tax planning advice.
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Old Feb 12th 2018, 8:43 pm
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Originally Posted by spouse of scouse View Post
the Australian government would still assess your income as though you received it, it's termed 'intentional deprivation', or in lay language, giving something up/away in order to gain an advantage.
This is interesting.

It's a surprise to me that you can't actually lose a UK pension, just have it frozen. Although it sounds as if the Australian Government might be able to sort that out as part of a Brexit deal with the UK.

Yes we'll definitely need financial/tax advice. We need to find out what determines residency and becoming an expat. Presumably my assets would be means tested jointly with my husband.
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Old Feb 12th 2018, 9:15 pm
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Default Re: Retirement - standard of living

Originally Posted by fal View Post
This is interesting.

It's a surprise to me that you can't actually lose a UK pension, just have it frozen. Although it sounds as if the Australian Government might be able to sort that out as part of a Brexit deal with the UK.

Yes we'll definitely need financial/tax advice. We need to find out what determines residency and becoming an expat. Presumably my assets would be means tested jointly with my husband.
The Australian government has nothing to do with Brexit.

You'll probably find that the dual taxation agreement between the UK and Australia will be beneficial to you.

Yes, the assets and income of both members of a couple are used to determine eligibility for the Oz age pension.

You can't 'lose' a UK basic state pension because it's a payment based on your NI contributions, whereas the Oz age pension is a welfare payment. The Australian government expects people to claim any benefits they're entitled to in their home country.

For residency, in simple terms your tax residency is determined by where you have your primary residence and spend most of your time. Your tax adviser will be able to tell you more, based on your particular circumstances.
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Old Mar 3rd 2018, 6:03 pm
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Default Re: Retirement - standard of living

Thank you for your reply and sorry for my slow reply.

The Australian government want the frozen pension situation dealt with after Brexit by "linking the uprating of UK pensioners living in Australia to any future trade agreement that may result between the UK and Australia".

I'm wondering what determines residency if we split our time evenly and have a property in each country and whether we need an Australian or UK tax adviser, or both.
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