You’ve worked all your life for it, so you’ll want to take your pension with you when you retire in Australia.
It shouldn’t be a problem if you’ve paid enough National Insurance over the years. State pension payments can be paid either into your UK bank account or an Australian bank account.
Bear in mind that Australia is one of the countries that if you move to, your state pension will be indexed (increase with inflation) annually until you reach state pension age, however indexation will cease being applied from the date you become entitled to receive benefits. This is not a big issue to most people, but worth noting.
The rules around maximising your entitlement to a full UK state pension can appear complex, and depend on your National Insurance record. Despite this, the rules for non UK residents are currently very favourable.
Below are some of the highlights of the rules that apply to Australian residents:
As a non-resident of the UK you can increase your entitlement by making voluntary contributions either by filling gaps (going back and making contributions for the last 6 UK tax years (6th April – 5th April) or making voluntary contributions each UK tax year going forward.
There are various classes of National Insurance contributions depending on your circumstances.
If you meet to following criteria as a non-resident you’re entitled to purchase class 2 contributions, which are significantly less expensive than class 1:
Current example of criteria
This is not an exhaustive list and is only intended as an example. It’s important you research or appoint a professional adviser like Jason to establish the criteria that applies to your individual circumstances.
This is much more important – and slightly more problematic.
You’ll still have access to these pots once you reach the requisite age, but due to your new location, you may need to pay additional charges or admin fees, or even be restricted in your investment options.
A lot of expats avoid the cost, exchange rate complexities and hassle of this by transferring their UK pensions to an Australian provider. This provider needs to be HMRC registered and you’ll need to choose a Qualifying Recognised Overseas Pension Scheme (QROPS).
Jason is one of Australia’s most specialist expat retirement financial planners. Get in touch to find out how he can help you.
If you have deferred benefits in an unfunded public servant pension such as a police officer, a NHS worker or teacher, unfortunately you may not have the option of transferring your pension pot overseas due to changes in legislation introduced by HMRC in April 2015. However, there may be exceptional circumstance that allow you to transfer the benefits in an unfunded scheme.
Australia has a progressive tax system, so the more income you earn, the more tax you pay. The tax-free threshold is $18,200 in a financial year and after that tax kicks in.
Australian residents are generally taxed on their worldwide income from all sources. However, temporary residents of Australia and foreign residents (Work out your tax residency – ATO) are generally only taxed on their Australian-sourced income – such as money you earn working in Australia, plus any income you make from employment or services performed overseas while you are a temporary resident of Australia.
This is important, as many expats initially relocate to Australia on a temporary resident visa, so foreign rental income and other foreign earnings and capital gains don’t have to be declared, as they are usually taxable in the country the income originates in.
However it’s important to note that where a temporary resident’s spouse is a permanent resident or citizen, this exemption may not apply. Equally, If you become a permanent resident or citizen, you’ll typically be subject to tax on all worldwide income and capital gains.
So it goes without saying, that managing your foerign income and investment gains in line with your residency status is of paramount importance to ensure the most optimal outcome.
The UK and Australia have a Double Tax Treaty/Double Tax Agreement. This helps protect you from paying tax on your pension in both the UK and in Australia
Some of the taxes you could encounter include:
Unfortunately, tax is notoriously difficult to navigate alone, and can depend on your legal residency status too. That’s where Jason can help, just get in touch.
Information on this website is general advice and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances.
You’ve worked all your life for it, so you’ll want to take your pension with you when you retire in Australia.
It shouldn’t be a problem if you’ve paid enough National Insurance over the years. State pension payments can be paid either into your UK bank account or an Australian bank account.
Bear in mind that Australia is one of the countries that if you move to, your state pension will be indexed (increase with inflation) annually until you reach state pension age, however indexation will cease being applied from the date you become entitled to receive benefits. This is not a big issue to most people, but worth noting.
The rules around maximising your entitlement to a full UK state pension can appear complex, and depend on your National Insurance record. Despite this, the rules for non UK residents are currently very favourable.
Below are some of the highlights of the rules that apply to Australian residents:
As a non-resident of the UK you can increase your entitlement by making voluntary contributions either by filling gaps (going back and making contributions for the last 6 UK tax years (6th April – 5th April) or making voluntary contributions each UK tax year going forward.
There are various classes of National Insurance contributions depending on your circumstances.
If you meet to following criteria as a non-resident you’re entitled to purchase class 2 contributions, which are significantly less expensive than class 1:
Current example of criteria
This is not an exhaustive list and is only intended as an example. It’s important you research or appoint a professional adviser like Jason to establish the criteria that applies to your individual circumstances.
This is much more important – and slightly more problematic.
You’ll still have access to these pots once you reach the requisite age, but due to your new location, you may need to pay additional charges or admin fees, or even be restricted in your investment options.
A lot of expats avoid the cost, exchange rate complexities and hassle of this by transferring their UK pensions to an Australian provider. This provider needs to be HMRC registered and you’ll need to choose a Qualifying Recognised Overseas Pension Scheme (QROPS).
Jason is one of Australia’s most specialist expat retirement financial planners. Get in touch to find out how he can help you.
If you have deferred benefits in an unfunded public servant pension such as a police officer, a NHS worker or teacher, unfortunately you may not have the option of transferring your pension pot overseas due to changes in legislation introduced by HMRC in April 2015. However, there may be exceptional circumstance that allow you to transfer the benefits in an unfunded scheme.
Australia has a progressive tax system, so the more income you earn, the more tax you pay. The tax-free threshold is $18,200 in a financial year and after that tax kicks in.
Australian residents are generally taxed on their worldwide income from all sources. However, temporary residents of Australia and foreign residents (Work out your tax residency – ATO) are generally only taxed on their Australian-sourced income – such as money you earn working in Australia, plus any income you make from employment or services performed overseas while you are a temporary resident of Australia.
This is important, as many expats initially relocate to Australia on a temporary resident visa, so foreign rental income and other foreign earnings and capital gains don’t have to be declared, as they are usually taxable in the country the income originates in.
However it’s important to note that where a temporary resident’s spouse is a permanent resident or citizen, this exemption may not apply. Equally, If you become a permanent resident or citizen, you’ll typically be subject to tax on all worldwide income and capital gains.
So it goes without saying, that managing your foerign income and investment gains in line with your residency status is of paramount importance to ensure the most optimal outcome.
The UK and Australia have a Double Tax Treaty/Double Tax Agreement. This helps protect you from paying tax on your pension in both the UK and in Australia
Some of the taxes you could encounter include:
Unfortunately, tax is notoriously difficult to navigate alone, and can depend on your legal residency status too. That’s where Jason can help, just get in touch.
The exact amount will be relative to your retirement dreams. Jason can help you plan and achieve them accordingly.
Here are some generic insights you may find useful when planning on retiring in Australia:
There is useful information on Moneysmart.gov.au about how much super you need to retire in Australia, however each individual has their own circumstances and needs. You’ll always need to consider these when estimating how much income you’ll require in retirement. Moneysmart is brought to you by the Australian Securities and Investments Commission (ASIC), the corporate, markets, financial services and consumer credit regulator in Australia.
Information on this website is general advice and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances.
This is a literal once-in-a-lifetime opportunity – don’t take any risks.
Jason can help you make the most of it. He has direct knowledge and everyday experience helping hundreds of expats not just make the move to Australia, but enjoy a golden retirement there too.
This is a literal once-in-a-lifetime opportunity – don’t take any risks.
Jason can help you make the most of it. He has direct knowledge and everyday experience helping hundreds of expats not just make the move to Australia, but enjoy a golden retirement there too.
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JASON O’CONNELL 2022 | ALL RIGHTS RESERVED
Jason O’Connell is an authorised representative (“AR”) of Shartru Wealth Management Pty Ltd ABN 46 158 536 871, AFSL no. 422409.
This website contains general advice only. You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Shartru Wealth and its authorised representatives do not accept liability for any errors or omissions of information supplied on this website.