As a cross-border financial planning firm with offices in both the UK and Australia, “can I transfer my UK pension to Australia?” is probably the question we are most often asked.
You may have recently moved back to Australia from the UK after a period of living and working there. Alternatively, you may be a Brit who has emigrated to Australia and now plan to retire here.
In both these scenarios, it is inevitable that you will have considered the possibility of transferring your accrued UK pension funds to Australia. So, you will want to know if you can.
Like most financial questions, however, there isn’t one straightforward answer.
Up front, we can confirm that it is possible, but there are some criteria you need to meet, both in relation to your personal circumstances, and the scheme itself.
Read on to find out more.
There are big advantages to transferring your UK pension
Because of the different pension tax regimes in the UK and Australia, it’s certainly the case that if you are able to transfer your UK pension to Australia, it can be highly advantageous to do so.
In the UK, your personal contributions would have attracted valuable tax relief at your marginal rate of Income Tax.
A different system applies in Australia. Your contributions are taxed at a concessional rate of 15%. However, if you are over 60, you generally will not pay any tax on your withdrawals from your super fund.
So, by transferring your UK pension to an Australian super, you will create a “win-win” scenario whereby you will have benefited from tax relief on your contributions but will pay no tax on the income you draw.
An additional benefit of transferring your UK pension to Australia relates to currency risk. If you are drawing income from a UK-based fund while you are living in Australia, you may be adversely affected by a fluctuating exchange rate. You can avoid that by transferring and, as a result, having your retirement fund denominated in the same currency you will be using in retirement.
Having read about some of the benefits, now read on to discover the four key issues related to whether you will be able to transfer.
1. Your UK scheme has to be eligible to be transferred
Before you can start thinking about transferring any UK pension arrangement to Australia, you will first need to check that it is the type of scheme that is eligible to be transferred.
In reality, most defined contribution (DC) pension schemes, including company and personal pension arrangements, can be transferred, along with private sector defined benefit (DB) schemes and some funded public sector DB schemes.
However, the following cannot be transferred:
- Your UK State Pension.
- Any unfunded final salary schemes, such as the NHS pension.
- Pensions that are already in payment.
- An annuity purchased with a life insurance company.
In these circumstances, you will need to draw from your fund in the UK and then access this from Australia. Because of potential tax issues, we would recommend you get expert advice in order to do this as tax-efficiently as possible.
2. The scheme you transfer your pension to must be approved by HMRC
If you have been reading about transferring your UK pension, you have probably come across the acronym “QROPS”.
This stands for Qualifying Recognised Overseas Pension Scheme.
The key point for you to bear in mind is that any Australian super you transfer your UK pension to must be a QROPS, and listed on the HMRC website as an approved scheme in order to be able to accept a transfer.
This will ensure that your transfer is fully compliant with UK and Australian pension regulations.
If you were to transfer to an unauthorised arrangement, you could face a tax charge of up to 55%.
3. You need to be old enough to transfer
You must be at least 55 years old to transfer your UK pension to an Australian QROPS. This will rise to age 57 from 2028.
However, if you are currently below age 55, that need not inhibit an eventual transfer, provided you have met all the other criteria.
In the meantime, while you are waiting to become eligible, if you have a series of pension funds you want to transfer, you may find it advantageous to consolidate them into a UK self-invested personal pension (SIPP).
Not only will this mean that all your pensions are in a single arrangement, and as a result potentially easier to manage, but you will also be able to start investing in Australian assets.
However, you should be aware that transferring some pension funds into another arrangement may not be the best course of action, as you may lose access to valuable benefits provided by the original scheme. Again, we would suggest you get expert advice before any kind of transfer.
4. Your pension fund must be big enough to transfer
The UK government has no mandated minimum amount that can be transferred to a QROPS. However, some super providers do have minimum transfer requirements, which are usually around £20,000.
It’s worth noting that the minimum transfer figure applies to the total of the transfer. So, if you have a series of UK funds totalling in excess of £20,000, you will be able to transfer, even if one or more of these are below the minimum amount.
You may not be able to transfer your entire fund to a super at once
You should also note that you are limited in the amount you can transfer into a super account in each Australian tax year. The maximum amount is the Non-Concessional Contribution (NCC) limit, which is currently AUD $120,000 in the 2025/26 tax year.
However, you may be able to make use of the “bring-forward” provision, which allows you to utilise the next two years’ worth of your NCC amount. This means that you could transfer up to AUD $360,000 immediately.
Any remaining funds will continue to be invested in your UK arrangement until the final transfer has been completed.
We would recommend that you get expert advice in this regard as making partial transfers may well have tax implications.
It’s important to get expert advice
As you can appreciate, dealing with two different financial planning and regulatory regimes is not straightforward.
Mistakes can be costly and are often irrevocable. Because of this, it’s important to get expert advice to ensure adherence with rules and regulations, as well as making sure you are doing the right thing in respect of your personal circumstances.
Get in touch
If you would like to discuss your own retirement plans or want to talk about transferring your UK pension to Australia, 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.