Moving to live in another country can be exciting and challenging. However, whether you are moving to work or simply to retire and live on your accrued pension savings, there can be financial complexities that you need to address.
For example, British expats in Australia often encounter unique challenges that can impact their retirement savings.
There are some key differences in saving for retirement between the UK and Australia that can create both problems to avoid, and advantages that you can benefit from.
Read about four common pension pitfalls many expats make, and strategies to help you avoid them.
1. Not having a retirement plan in place
One benefit often cited about moving from the UK to live in Australia is the more relaxed lifestyle. However, that laid-back attitude should not extend to your retirement planning.
Even if retirement feels a long way off, not having a clear plan can cause problems later, especially when your assets are split between two countries.
There are several important considerations you’re going to want to bear in mind as part of your planning process, including:
- When you want to retire
- What you want to do once you have stopped working
- How you’re going to fund later life.
Considering these three elements will give you a good understanding of how much income you will need and, working back, how much you need to have saved.
With that information, you will then be able to put together a comprehensive plan with clear pension targets for your future.
The importance of having a plan is only heightened by the fact that you may have moved from the UK to Australia and, as a result, are likely to have pension assets in both countries.
2. Not transferring your pension funds to Australia if you plan to retire there
What you do with your UK-based pension funds is a key part of your planning process.
Because of the different tax treatment of UK and Australian retirement savings options, there is a highly advantageous scenario you can create for yourself. Overlooking this could be a very expensive mistake.
In short, while Australian super contributions and growth are both taxed, you’ll generally pay no tax on income you draw from your fund. The reverse applies in the UK, where contributions to your pension are highly tax-efficient, but you will pay Income Tax on the bulk of your fund once you start drawing from it.
This means that, by transferring your accrued UK pension fund to a QROPS (Qualifying Recognised Overseas Pension Scheme) super fund, you create a “win-win” outcome from a taxation perspective.
But it’s not always straightforward. You’ll need to meet eligibility criteria, and your long-term residency plans matter. We would strongly recommend that you get expert advice if you are considering transferring your UK pension to a QROPS to ensure you’re able to take full advantage.
Find out more: 7 key facts about QROPS you need to know if you have pension assets in the UK
3. Ignoring currency risk
You may be unable to transfer your UK pension fund to an Australian QROPS because you do not meet the necessary criteria.
If that is the case, and you are living in Australia but drawing retirement income from a UK pension denominated in sterling, currency fluctuations could significantly erode your purchasing power.
You just need to look at the UK Sterling to Australian dollar exchange rate over the last five years to appreciate the importance of long-term currency planning.
Source: Google.com
A low of AUD$1.67 in September 2022, to a high of $2.09 in May 2025, means a 25% variation in the Australian dollars your UK sterling would have bought you.
Clearly, this level of fluctuation will have a significant bearing on your income.
Because of this, if you are unable to transfer your UK pension to Australia so it is denominated in the same currency you are using daily, we would recommend that you use a currency exchange specialist.
They will be able to ensure that you get the best possible exchange rate. They will also have access to a range of exchange options to help provide you with a valuable level of income security.
Find out more: The impact of exchange rates on expat Brits in Australia
4. Failing to get expert advice
Given the complications around being an expat, and potentially having substantial assets in both the UK and Australia, not getting expert financial advice could be a significant mistake.
Furthermore, the complex nature of cross-border financial planning means that it can be highly advantageous to work with an advice firm that’s authorised to provide advice in both the UK and Australia.
At bdhSterling, we’re dual-licensed, which means we can help you navigate the complex regulations for both countries. This means you can avoid any common and potentially costly mistakes.
You will have the peace of mind of knowing that you are making the most of your money and living the lifestyle you want.
Find out more: Why it’s important to work with an adviser with dual registration if you are a UK expat in Australia
Get in touch
If you’re a British expat in Australia and want to make the most of your retirement savings, or explore whether a UK pension transfer to Australia is right for you, we’re here to help. Please get in touch with us.
Please note
This article is for information only, it does not take into account your personal objectives, financial situation, or needs.
Please do not solely rely on anything you have read in this article and ensure that you conduct your own research to ensure any actions you may take are suitable for your circumstances.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
All contents are based on our understanding of HMRC and ATO legislation, which is subject to change.