Can I transfer a pension from the UK to Australia
2 August 2024

Can I transfer a pension from the UK to Australia?

If you have a UK pension and you have moved to Australia, or are planning a sunny retirement Down Under, moving your pension over with you can make a lot of sense. After all, retiring should be about kicking back and spending time doing what you love, not stressing about financial matters or dealing with paperwork on the other side of the globe.

At The Wealth Designers, we are all about Living Well, and what better way to do that than with a comfortable and fulfilling retirement in a place you love? Funding your ideal lifestyle may be easier than you think, with a tax-efficient Aussie-based retirement scheme. Here’s why… 

Why should I consider transferring my pension to Australia?

There are many benefits that may make transferring your pension to Australia a smart money move. 

  1. Tax-efficiency

    This really is the lucky country! Retirees over the age of 60 in Australia have the benefit of tax-free retirement income. All income and drawings from superannuation funds are entirely free of tax, in contrast to UK schemes, which are taxed at the marginal rate (up to 47%). This will clearly have a big impact on lifestyle and the opportunity to enjoy the finer things, now you finally have time.
  2. Ease of management

    It’s got to be easier to have your fund managed locally, especially with a pesky time difference. Being able to pick up the phone and talk to someone to sort out any issue is a big win.
  3. Costs & risks

    If your funds are in a different currency, you carry an unnecessary exchange risk which can cause your money to lose value overnight. It’s a headache you don’t need to take on. You will also face ongoing transfer fees if you are regularly moving money overseas, which can all add up
  4. Succession planning

    UK pensions are often subject to tax when the pension holder dies and, in some cases, cease entirely with the death of the pension holder’s beneficiary. The Australian superannuation system doesn’t have the same restrictions on death benefits, meaning that your loved ones’ inheritance (and the fruits of your labour) will be less impacted. 

How do I get started with the transfer process?

Transferring your pension is a big decision, and we’d always recommend getting professional advice. Luckily, this is a well-travelled path, as the lure of year-round sunshine and the Aussie lifestyle has long attracted UK retirees. As a result, a specific breed of financial advisers, known as transfer specialists, specialise in helping people like you avoid the pitfalls and minimise tax (and hassle) while making the move.

We can hook you up with an experienced professional to start the conversation here:
https://twd.com.au/contact

What Age Can I Transfer My Pension?

One important fact to bear in mind is that pension fund members must be 55 years of age or older. If you are under 55, it’s still worth getting advice and figuring out the best option for your funds for your age and stage. 

Where to Transfer a UK Pension?

This is a really important one! To avoid penalties, unnecessary tax and a whole lot of hassle, you need to make sure that the receiving fund in Australia is an HMRC Qualifying Registered Overseas Pension Scheme (QROPS). The UK Revenue Service maintains a list of registered schemes, and it is up to you to make sure yours is on the list. Unfortunately, there is no shortage of scammers in the market, yet another reason to invest in professional advice from the start.

What Are the Tax Implications?

Of course, every situation is different, and individual advice is key. The tax treatment of your funds depends on certain contribution limits in the UK and Australia, whether a lump sum is involved, whether there is a refund due to the member and the prevailing tax rules in Australia (and the UK). That’s a long way of saying that, with the right advice, you can avoid unnecessary tax bills and potentially have more disposable income for your Aussie adventure.

Why Should I Consider a Transfer Specialist?

Transferring your pension overseas is new territory for you, but it is business as usual for The Wealth Designers’ transfer specialists. Dealing with our experts can help you avoid unnecessary taxes and fees and give you peace of mind. Unless you love dealing with paperwork, we suggest you ease your mental load, leave the heavy lifting to us and instead concentrate on making memories! 

Ready to Transfer Your Pension?

If you’re ready to take the next step, we’ve got the people who can help. The Wealth Designers have assembled a team to support you through this once-in-a-lifetime move.

For more detailed information and personalised advice from our team, visit: https://twd.com.au/transfer-a-uk-pension/