Ban On Pension Transfers From UK

Whilst you’re toned and tanned, pensions may be the furthest thing from your mind, but Paul Lawson-Tyers of Global QROPS explains why it’s important to address where your money is if you’re settling in Australia for the long haul.

Whether you are considering emigration to Australia or you have actually made the move, if you have built up pension funds in the UK then you should be considering whether a transfer to Australia will be in your long term interests. Due to a change in pension rules in the UK, it is particularly important that you address this immediately if you have benefits within any of the following ‘Unfunded’ Public Sector schemes:

• NHS
• Teachers
• Police
• Civil Service
• Armed Forces
• Firefighters

The UK government will no longer allow transfers to be made from these schemes from 6th April 2015. Although this is several months away, this does not mean that you still have a while to act. It can take three months to obtain a valuation, after which an assessment must be made as to the suitability of a transfer. If a transfer is then recommended, you would need to set up a new scheme to which the funds can be sent and submit your transfer request to your existing scheme administrators before 6th April 2015.

This means that we are already starting to run out of time and you must therefore act quickly in order to ensure that you do not potentially miss out on the chance to make a transfer. There can certainly be tax advantages if you transfer your funds; when you retire in Australia and draw benefits from an Australian scheme, your lump sums and income will be free of tax. If you were to draw those benefits from your existing UK schemes instead then it would be subject to tax in Australia. In addition, your income would
be subject to fluctuations on the exchange rate throughout your retirement.

Having said this, there are a number of other considerations that must be taken into account before a transfer is recommended. Even with the taxation benefits of moving your funds to Australia, you could still find that you would have been better off in your retirement by leaving them in the UK. This is particularly the case with “Final Salary” pensions, which are very different to Australian pension schemes (called Superannuation); a careful analysis must be conducted before taking the plunge. Although a transfer is usually the best course of action, it should not be assumed that it is in your best interests to do so until you have received proper advice and analysis.

Whether you have benefits in one of the above listed schemes or you have benefits in any other UK scheme (whether “Final Salary” or otherwise e.g. Personal Pensions) please speak with one of the Global QROPS advisers today on 0044 (0)1372 724249 about how we can help you to take the next steps or visit www.globalqrops.com for more information.