Why And How To Transfer Pensions To Oz

Superannuation refunds lost money, Saving money on working holidays in Australia

To get the low down on transferring your pensions down under, we catch up with the professionals at BDH Stirling.

What are the 3 main reasons why someone should transfer UK pensions to Australia?

  1. You can draw on your pensions tax free
  2. Your pension will be in your local currency so you have eliminated the ongoing risk of currency fluctuations.
  3. Increased flexibility including ability to take higher tax free lump sums in Australia

Is it worth transferring your pension straight away, or should you wait a few years?

Transferring UK pensions to Australia is a one way transfer. You need to make sure you are going to be staying in Australia long term before you transfer your UK pension to Australia. The timing for the transfer is important and you certainly need to be aware of the exchange rate and the current legislation at the time of transfer. In the meantime, there are still options to explore in the UK.

How complicated is it to transfer your pension?

Since 1st July 2015, it has become very complicated to transfer pensions to Australia from the UK as many Australian Superannuation Schemes were removed from the QROPS (Qualifying Recognised Overseas Pension Scheme) list as set by HMRC in the UK. You can only transfer a pension out of the UK to a QROPS. In addition, if you have a final salary schemes (defined benefit scheme) there is an additional level of analysis required before advice can be provided due to the complexities of these schemes. There are also annual contribution limits in Australia to abide by when transferring pensions from the UK so some people will require to transfer their pensions in tranches which we can help with.

Can you do it yourself? What are the advantages of using Global QROPS?

If you have a Final Salary pension scheme (Defined Benefit scheme) with a transfer value over £30,000 it is a regulatory requirement to take advice from an FCA regulated Financial Advisor on the transfer of your pension scheme. If your pension scheme is a Defined Contribution pension scheme you are not required to take advice and it is possible transfer your pension yourself to a complying QROPS if you feel comfortable with the process.

Global QROPS, being based in the UK as well as having 3 office in Australia, we are best positioned to be able to provide you with advice and guidance on both UK and Australian regulatory requirements. We have created a process to not only make sure you are abiding by all the QROPS rules, avoiding up to 55% tax charges, but also help you to save money on the conversion of your pension funds by including the services of a currency broker.

Global QROPS was built to specialise in the transfer of UK pensions overseas. With the wealth of knowledge from our UK and Australian offices we will make sure that you are making the right choice for you and will create a solution which is tailored to your requirements.

Do you just have one company you work with or do you find the best one? Are there comparison sites?

Global QROPS is a team of FCA Regulated Financial Advisers and are not tied to any one provider. We will recommend the best provider which fits in with your circumstances.

What happens if I want to move to another country in a few years? Will there be any be any issues?

As mentioned above, transferring UK pensions to Australia is a one way transfer. Australia do not allow the forward transfer of pensions out of Superannuation Schemes so you will need to make sure you will be staying before you transfer your UK pension to Australia.

Is Australian Superannuation the same as a UK pension?

Australia use the word Superannuation instead of the word pension but they are very similar products. The major difference is how they are taxed. UK pensions receive tax free growth and tax relief pre-retirement then at retirement you can receive up to a 25% tax free lump sum with the remainder taxed upon withdrawal. In Australia it is the opposite way round so they tax Superannuation on the growth of the funds pre-retirement and then you can take the proceeds tax free in retirement.

Are there any pensions you can’t help with?

We are only regulated to provide advice on and facilitate the transfer of a UK pension scheme. We can assist with either work or personal pensions. The only UK pensions we cannot assist with is Public Sector pensions including NHS, Teachers, Civil Service, Police, Armed Forces and Firefighters. The UK Government banned the transfer out of these on 6th April 2015.

On another note, you are not able to transfer your UK state pension to Australia. Providing you have a minimum of 10 years of National Insurance Contributions, you will not lose your UK state pension and will still be able to claim this from Australia once you reach state pensionable age. However, the state pension is open to legislation changes going forwards so the rules can change at any point.

Talk through your Pension Transfer options with the team from BDH Stirling or visit their website here