10 top tips to help Brits retire successfully in Australia

With its welcoming climate, outdoor lifestyle, and lack of a language barrier, Australia has long been a popular destination for Brits looking to work, and then ultimately retire, overseas. So much so that there are currently more than a million expat Brits living in Australia – nearly a quarter of whom are claiming their State Pension there. (Sources – ExpatNetwork. com and Unbiased.co.uk)

However, retiring in Australia, especially after spending most of your life working in the UK, won’t happen by accident and takes careful planning.

Whether you plan to retire in the next few months or retirement is still many years away, this guide will help you start thinking about your options.

In this guide we:

  • Highlight the things you should consider to ensure you have ‘enough’ in retirement
  • Suggest some simple actions you can take now
  • Explain how we can help you retire successfully

So, read on for ten top tips to help Brits retire successfully in Australia.

We are perfectly placed to advise you. We have a licence to provide financial advice in both the UK, and Australia, and have offices in both countries. We provide a genuine ‘one-stop’ shop for people moving between the two countries.

You can either download the guide as a PDF or read it below. Should you have any questions, please don’t hesitate to contact us.


1. Think about how and when you will retire

Retirement is changing. For many of us, the days of finishing work on a Friday and starting retirement on a Monday are long gone. More of us are easing our way into retirement, perhaps working as a consultant or on a part-time basis before completely giving up work. There’s no correct or incorrect answer; only what’s right for you.

As an expat Brit now settled in Australia you’re likely to have pension savings both here and in the UK. It’s important to be aware that different rules and regulations apply to how and when you can take the money, and you’ll need to take this into account when considering when you want to retire.

How we can help

We have extensive experience in advising clients on their retirement planning and can support you with your transition from work to retirement.

2. Consider what you want to do in retirement

At the same time as considering when and how you will retire, you should think about what you want to do in retirement.

Some people might have big plans to see the world, learn new skills, or tick things off their bucket list. Others might want to stay a little closer to home, perhaps to help more with their grandchildren. Again, we’re all different and there’s no right or wrong answer. Only yours.

Naturally, your ambitions will be linked to your financial resources. The larger your income or capital base, the more that will be possible. Having said that, we know that many people are too cautious with their money in retirement when, in reality, they have the financial resources to do much more.

So, now is the time to dream and set lofty ambitions. You never know what might be possible!

How we can help

We’ll help you review your plans and aspirations for retirement. What you think is impossible might be achievable.

3. Think about where you want to live in retirement

Retirement can often cause people to reflect on where they live.

Some people might be happy to continue living in their current home. Others will want to move, perhaps to somewhere smaller, while some people might buy a second home.

You might also want to think about moving to a different part of Australia to where you live currently and retiring there – maybe somewhere quieter, closer to the coast or where you’re guaranteed year-round sunshine.

Again, there are no right or wrong answers. However, these are big decisions which will often require lump sums of money, which once used to purchase property, cannot easily then provide an income.

How we can help

Deciding where you will live is as much an emotional decision as it is a practical one. Your decision will affect your family too. That means it could take some time to think this one through so everyone is happy.

Our experience with clients looking to retire means we’re ideally placed to support your decision-making process.

4. Understand whether your mortgage should be repaid before retirement

In years gone by, it was generally agreed that repaying your mortgage before retirement was sensible, as it helped to free up income.

In many cases that’s still true. As we said, though, retirement is changing. Low interest rates and the flexibility you could get through accessing your pension funds mean that for some people retiring while they have debt outstanding is possible.

So, now’s the time to start thinking about your mortgage and whether repaying it will help you achieve your retirement goals or even allow you to stop working earlier than you thought possible.

How we can help

As financial planners, we can help you make an informed decision about whether you should repay your debt before retirement.

We’ll consider a range of factors, including your income and expenditure in retirement, the availability of capital, your plans, and interest rates before making a personalised recommendation.

5. Understand whether you’ve got ‘enough’ to retire

So, you’ve thought about:

  • When you want to retire
  • How you want to retire
  • What you want to do when you retire
  • Where you want to live

Now’s the time to understand whether you can afford your preferred lifestyle. In other words, have you got ‘enough’?

If it turns out that you have, you will have the option of immediately moving on to the next phase of your life. If you haven’t already accumulated ‘enough,’ this exercise will highlight your income or capital shortfall. To accurately assess whether you have ‘enough,’ you need to understand:

  • What you’re likely to spend in retirement, on both essential and discretionary purchases
  • The lump sums of capital you might need in retirement
  • Your income during retirement.

You will also need to make assumptions for:

  • Inflation
  • Taxation
  • Investment returns

both here in Australia, and, if applicable, in the UK.

You will also need to factor fluctuations in the exchange rate into your calculations and potentially your domicile and residency status. Of course, having ‘enough’ on the first day of retirement is one thing – ensuring that you don’t run out of money is another. That means you need to factor your life expectancy and that of your partner/spouse into your calculations, especially as experience tells us that many people underestimate how long they will live.

  • The current average life expectancy in Australia is 83.5 years.
  • Men aged 65 in 2016–2018 could expect to live another 19.9 years (an expected age at death of 84.9 years)
  • Women aged 65 in 2016–2018 could expect to live another 22.6 years (an expected age at death of 87.6 years)

As you can see, accurately assessing whether you have ‘enough’ both now and in the future is complex. This is especially true if long-term care is needed, and there can be many other variables that require careful modelling.

How we can help

Understanding whether you have ‘enough’ isn’t easy. There are many factors to consider, many of which, for example, life expectancy and inflation, it is only possible to estimate.

As experts in working with expat Brits thinking of retiring in Australia, we can tie everything together for you. We will use sophisticated cashflow forecasting software to project your income and expenses into the future.

We’ll also include any items of capital expenditure, to clearly show whether you have enough money to live your preferred lifestyle in retirement.

Naturally, we will consider the factors, such as inflation, taxation, and life expectancy, to develop an accurate picture of what lies ahead and whether you can afford your preferred lifestyle.

We will also model different scenarios to see how they affect your retirement. For example, you might want to consider retiring sooner than you had planned, but with more modest ambitions or giving lump sums of money away to your children. There is always the possibility that you might want to return to the UK. Again, we can model this into the forecast.

Finally, we’ll regularly update your cashflow forecast to ensure you remain on track to achieve your goals.

6. Decide where to take income and capital from

So, the calculations show that you can afford to retire here. Now you need to develop the optimum income strategy to minimise your tax bill.

The good news is that Australia has a Double Taxation Agreement (DTA) with the UK, which ensures you aren’t taxed twice on the same income in two different countries. If you retire in Australia, for example, but were still taxed on assets in the UK, the amount of UK tax payable would be deducted from the tax you paid in Australia.

Your sources of pension income will probably fall into three categories:

State Pensions: From here in Australia and in the UK, although this is complex and subject to means testing. You should bear in mind that the State Pension is not index linked if you live in Australia.

UK pensions: In the UK these could be Defined Contribution pensions, for example, Group Personal Pensions or auto-enrolment, or Defined Benefit schemes (also known as Final Salary pensions). Any pensions paid in the UK while you are living in Australia will be subject to Australian tax and will also be subject to fluctuations in the exchange rate between the two countries.

Australian Superannuation: Contributions to the Australian Superannuation Scheme (‘Super’) are compulsory, so you’ll have built up a fund in that scheme, having lived and worked here.

It’s worth noting that you can transfer your UK pensions to the Australian Superannuation Scheme and access them tax-free at retirement. It can therefore make sense to transfer your UK pensions to Australia if you’re planning to retire there permanently.

Note that you can only transfer your UK pensions to Super once you have reached 55, and transfers are subject to scheme contribution limits. There are also restrictions on the types of scheme that you can transfer.

You can start taking benefits from the scheme from age 60, and all income taken is free of tax.

In addition to pensions, you may have other investments which could provide an income. These might include:

  • ISAs (Individual Savings Accounts)
  • Other investments such as managed portfolios
  • Shares
  • Buy to Let property
  • Onshore and offshore bonds
  • Buy to Let property
  • Onshore and offshore bonds

When you retire in Australia it’s likely you’ll be in the situation of having assets in both the UK and here. Deciding which to take income and capital from isn’t straightforward and should be planned carefully.

How we can help

The interaction between your UK and Australia assets must be carefully considered. As we said at the start of the guide, having assets in both countries presents opportunities and threats.

We specialise in working with Australians in the UK, and vice versa. This means we have the knowledge and expertise to ensure you withdraw income and capital as tax-efficiently as possible from your worldwide assets. We’ll help you take advantage of the opportunities and avoid the threats.

7. Consider moving assets from the UK to Australia

If you’re planning to retire in Australia, and likely to remain here permanently, you’ll probably want to transfer some or all of your UK assets.

With two different tax regimes to consider, and assets under both, it’s essential that the movement and disposal of assets is managed carefully to avoid you ending up with a hefty tax bill, either in the UK or in Australia, that could easily have been avoided.

For example, disposal of UK assets as you’re resident in Australia will likely result in Australian Capital Gains Tax (CGT) being payable. Unlike the UK, there is no CGT allowance, so planning around the timing of disposal of assets is crucial.

How we can help

As with any financial decision, there are advantages and disadvantages to moving assets from the UK to Australia. Furthermore, it’s likely that there are tax implications when transferring your accumulated pension funds to an Australian pension.

You’re making these decisions for the first time. We have helped countless Brits emigrate and retire in Australia. Making the wrong decision could be irreversible and costly.

That’s why it’s important to seek advice from a financial planner who has experience of working both here in Australia and in the UK

8. Check your UK State Pension

The UK State Pension will form part of the retirement plan of almost everyone living in the UK and for many will be the bedrock of their income in retirement. It’s inflation-proofed and guaranteed, with the ‘triple lock’ protecting its real value each year. However, if you are intending to live and retire in Australia,

you should note that while you will still receive the UK State Pension, it will not be indexed, and will therefore reduce in value in real terms each year.

Furthermore, to be eligible for the State Pension in Australia you must have been an Australian resident for at least ten years.

How we can help

We can put a robust retirement income plan in place for you based on all your sources of income, including State Pensions.

9. Prepare for the emotional consequences of retirement

Retirement represents a significant change in our lives. In many respects, it’s more disruptive than almost any other period. Retiring in a different country from where you grew up and worked, even more so.

Many of us are defined by the success of our career or business. While work provides mental stimulation and social interaction, when we retire, those things often disappear.

Therefore, retiring successfully is more than just about money. Naturally, you will want to have the financial capability to do what you want and when, but those who prepare both emotionally and financially will gain the most from their retirement.

How we can help

We’ve helped many clients with their retirement planning, so we have a good understanding of the stresses and challenges involved.

10. Consider the impact of not making it to retirement

We’ve already shown you how to calculate your life expectancy and the chances are you will live many happy years in retirement. Unfortunately, some people don’t reach that age.

You should ensure that you have suitable life cover in force to ensure your family are provided for in the event of your death. It’s also worth considering income protection and critical illness cover in the event that you were unable to provide for them anymore because of illness or disability.

You probably know who you want your assets distributed to when you die. The only way of ensuring this happens is by having a will in place, both in Australia and here in the UK. However, over half of UK adults don’t have a will. Dying without a will (or ‘intestate’), means that you and your loved ones have no say over what happens to your assets. Instead, they will be distributed according to the rules of intestacy, which do not take your wishes into account. Therefore, writing, or revisiting, your will should be a priority in the run-up to your retirement.

Furthermore, you may well be a member of pension and superannuation schemes which will pay out a lump sum on your death. To ensure that the money is paid quickly, and to your chosen beneficiaries, you should ensure you have completed the applicable nomination forms. The same applies to all your pensions both here and in the UK.

How we can help

If you don’t have a will which reflects your current wishes, now is the time to do something about it. You may well have assets which would need to be distributed on your death.

Consequently, you should use a solicitor in both the UK and Australia, each of whom has experience in working with people who have spent time in both countries. We would be happy to recommend solicitors with the necessary knowledge and experience.

Next, ensure that you have the correct nominated beneficiaries for any schemes, and pensions.

We can also help you review your life cover and income protection arrangements to ensure your family are provided for in the event of your death or you being unable to work

Get in touch for expert advice

Planning for a successful retirement is complicated enough for people who have assets in one country. If you’re thinking of retiring to Australia, you could well already have assets both there and in the UK or could easily end up in that situation.

As we’ve said throughout this guide, this complexity brings opportunities and threats. Our experience of working in both countries means we are ideally placed to enable you to take advantage of the opportunities while avoiding the threats.

So, whether you are a few months from retiring or several years, there’s no time like the present to start your planning.

We have a licence to provide financial advice in both Australia and the UK, and have offices in both countries. We provide a genuine ‘one-stop shop’ for people moving between the two countries.

We’re here to help so call us on 1300 234 369 to arrange an initial discussion.