jo n craig

Just wondering what people have done with their pension??
Have you put it on hold or have you transferred it?
I've been paying into mine for the past 7 years and I'm very confused about what to do.
Any help will be greatly received!

hereshoping

We got confused, so froze it until we could decide what to do. Complete cop out I know

Australia_bound?

Wouldn't that mean youll end up with a big tax bill when you claim it or transfer it over. Think it's 6 months to transfer to avoid taxation

hereshoping

Did look into this- I believe if it's transfered directly into a super fund then you don't end up with a huge tax bill as you would if you took it in cash.

However we're not sure if we'll retire in Oz, so we weren't sure we wanted all our funds in our Oz super. If we're living elsewhere then again we won't get a huge tax bill from Oz when we claim.

Australia_bound?

Glad you looked into it. Personally saw a similar thread on main Aus board discussing same issue, opinions varied very much as what was best to do. If you're undecided where you'll retire then your doing the right thing I'd say

jo n craig

Oh I'm even more confused!!!

So if I move it within 6 months of emirgrating then I don't get taxed but if wait to see whether we settle then I'll get a huge tax bill ????

Jo x

hereshoping

Only if you take it as cash instead of transferring your UK pension into your australian super. I believe, I could be wrong.

nbn8

I didnt think that you could take your pension as cash. Maybe I am wrong I thought you have to either freeze or transfer is this not the case?

coolerkingcooler

I thought it was possible to cash in, in the past but not anymore - although not sure if you can if only paid in a few years.

I think the options (as I was aware of) are freeze or transfer - something I have put to the back of my mind with house on market and visa issues.

Maybe someone can post a link, I'll have a look when I've finished some marking

Cooler

nbn8

Just found this link which may help:

http://www.teacherspensions.co.uk/re...factsheet3.htm

coolerkingcooler

Thanks, that is great!

Cooler

jo n craig

Cheers for that!!!

Bookmark

Dear jo n craig,

There are many advantages to having your pension monies in Australia Superannuation as opposed to the UK, even Final Salary schemes.

In a nut-shell, you really only have 2 options:

a) Leave the Pension fund in the UK, or
b) Transfer it to Australia?

Everybody's situation is different so you should get some advice specific to your circumstances so you can make an informed decision.

Drew Hawkins

Nick11

I transferred mine. Not sure if it was the right decision in hindsight - but nobody could have foreseen the crash last year!
I only had 12 years super - basically I did it on the basis that if I died - hubby and kids would get the whole pot straight away.
And that in 20 years time who knows what the u.k government would do to stop us from claiming it if we resided in a foreign country.
Not sure if it was the right choice - but I've done it now - no turning back!


Or looking back for that matter!

Bookmark

One thing to note with a Final Salary scheme.

When you leave the scheme, the Trustee is only obligated to "grow" your pension by inflation or 2.5%.

Now considering "normal" financial markets, a return of 7.0% over time is very achievable.

Now if you have your capital compounding over a number of years at 7.0% (in Aust super) vs 2.5% in the UK, you will generally have substantially more money for your retirement from the Aust scenario - even after paying the Aust tax on the transfer & possibly a fee on the transfer.

Plus the estate planning benefits in Australia.

Furthermore, remember your UK Pension sourced from the UK will be taxed every year for the rest of your life - currently at 20% - & subject to exchange rate fluctuations.

Some food for thought.

Drew Hawkins