If you’re planning to move to Australia or have recently done so, one important financial planning issue you will need to consider is what to do with any retained pension funds you have in the UK.
This will be particularly crucial if you’re ultimately planning to retire in Australia. If you are, there are strong financial and practical reasons to transfer your accrued UK funds into an Australian super.
However, transferring is dependent on several issues, including whether you have reached the age of 55.
Read why that’s the case, and the steps you need to take if you either have or haven’t reached that age.
Transferring your UK pension to Australia can be highly advantageous
To comply with HMRC regulations, if you want to transfer your pension fund to another country, you have to ensure the receiving scheme is a Qualifying Recognised Overseas Pension Scheme (QROPS).
Specific Self-Managed Super Funds (SMSFs) can be QROPS if HMRC approves them.
There are several benefits of transferring your UK pension to such an arrangement.
These include:
- Having all your retirement income in one country makes administering it easier.
- Your retirement funds could be denominated in Australian dollars, which removes currency risk.
- Tax planning and reporting become easier as you are dealing with one jurisdiction.
Perhaps most importantly, you will benefit from a highly advantageous tax position, as income drawn from your fund in Australia is tax-free, unlike in the UK. However, you will have accrued your fund with tax relief in the UK, making this a real “win-win” scenario!
But there are some important challenges and issues relating to transferring. In particular:
- Transferring may not be the right thing for you to do, either immediately or at a later date.
- The Non-Concessional Contribution Cap (NCCC) limits the amount that can be paid into a super fund net of tax, including transfers, to $120,000 a year.
- UK pension funds cannot be transferred to Australia until you are 55 (rising to age 57 in 2028)
- Any growth since Date of Arrival will be taxable as Applicable Fund Earnings upon transferring to Australia
Because of this, we would always recommend you get expert advice both before deciding to transfer your funds and throughout the transfer process.
Find out more: Thinking of transferring your UK pension to Australia? Here’s how we can help
If you’re planning to move to Australia in 2026 you need to know about QROPS
Scenario 1 – You have not yet reached the age of 55
As you have read, if you’re under 55, you can’t yet transfer your UK pension funds to a QROPS.
However, there are steps you can take in advance to simplify the eventual transfer process and put yourself in a strong position for the future.
You do this by moving your pension savings into a Self-Invested Personal Pension (SIPP).
Many SIPP providers offer specific benefits to clients, including:
- Access to wholesale FX rates
- The ability to access $AUD investments to help mitigate currency risk
- Giving you full control over your UK-based retirement funds in a single arrangement
- The ability to still make contributions if you have earnings in the UK, such as from rental income from property you own.
Then, when you reach age 55, having all your funds in a single SIPP arrangement can help ensure a smooth, compliant transfer to your new super fund.
Before taking these steps, it’s important to get advice from a financial expert who can help you carry out a careful assessment of your current circumstances and plans to ensure that transferring is the right course of action.
Scenario 2 – You have reached the age of 55
As you have read, if you’re 55 or over, transferring to a QROPS can be highly advantageous.
All your pension funds are in the same country as where you intend to spend your retirement, and you can enjoy a very favourable tax position.
However, it’s important to have an effective transfer strategy in place. Mistakes can prove costly and could result in an unwelcome 55% tax penalty from HMRC.
If you haven’t already done so, you can ease the administration burden by transferring into a single arrangement SIPP. You may have already done this, as mentioned previously.
Before transferring, it’s important to consider the NCC limits on contributions to a super fund in any one tax year.
The NCC limits transfers to $120,000 a year (2025/26 tax year). However, you may be able to make use of the “Bring-Forward” facility, which allows you to make three years’ contributions ($360,000) in a single tax year by bringing forward the next two years’ contributions.
You can then put an effective investment strategy in place to continue growing your SIPP fund, aligning it with your QROPS funds and any other investments you have.
After three years, you can then use the bring-forward facility again to transfer a further tranche of money from your SIPP into your super, subject to the applicable NCC limit at the time.
Find out more: 6 of the most common questions we get asked about QROPS
Get in touch
As you’ve read, expert advice when it comes to planning for your eventual retirement is important.
bdhSterling are widely regarded as the leading UK-to-Australia pension transfer specialists. All our advice is delivered in-house by dual-qualified UK FCA and Australian ASIC-licensed advisers – not outsourced firms or affiliate partners.
This means you receive fully integrated, compliant, cross-border financial advice from one specialist, coordinated team.
Working with us can give you the confidence and peace of mind that comes from having an effective, robust financial plan in place.
If you would like to discuss your own financial plans, please get in touch with us today.
Please note
The value of your investment 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.
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.
All contents are based on our understanding of HMRC and ATO legislation, which is subject to change.