Moving across the world to Australia can open up a world of opportunities for you – socially, professionally and financially.
But the paperwork and red tape can get confusing amongst all the other plans for setting up a new life – or settling back into an old life – in the lucky country. Finding a house, choosing a new doctor, shopping at a new supermarket . . . you have so much to think about in the short term, but have you considered your retirement plans and how you can access your pension from abroad?
There have been a number of legislative changes in recent times that have affected how and when you can transfer your pension from the UK to help prepare you for a future in Australia.
These changes come with a number of strict deadlines and time is running out to act while you can. It’s important you understand how your future financial wellbeing will be impacted by what decisions you make now.
Read through our simple guide below to find out how you can make this process as easy and stress-free as possible.
What’s the urgency with NHS transfers? Why do I need to act now?
Have you already lodged your NHS pension transfer and hit a brick wall? We hear your pain.
As of 6 April 2015, government-imposed changes resulted in a transfer ban for all ‘unfunded’ public sector pensions (e.g. NHS, police etc), including those in progress. This means thousands of people with this specific type of pension – such as doctors, nurses and health practitioners – have hit a dead end in their pension transfer journey.
A small window of opportunity has opened for bdhSterling to re-lodge any transfer requests for unfunded public sector schemes that are ‘stuck’ in the system, provided the original request was lodged before 6 April 2015.
If you don’t move this type of pension over from the UK by the deadline, your retirement income will be assessable for tax for the rest of your life.
So you need to move quick! Less than two months until D-Day . . .
Am I eligible to transfer my UK pension to Australia?
There are certain conditions that determine whether or not you can transfer your UK pension directly to Australia – or if there are other steps you need to take along the way.
The bdhSterling UK Pension Transfer Starter Kit goes into detail about what this eligibility criteria is.
Why should I consider a pension transfer from the UK?
By transferring your pension either offshore temporarily (if you’re under 55) or to Australia directly (if you’re over 55), you can take control of your financial future in the country in which you intend to retire.
There are a number of reasons why you should consider making the financial move:
- Transfer now or potentially be taxed for life – not many people realise that income from any pensions retained in the UK or offshore is assessable for tax for the rest of their life in retirement. To avoid the possibility of having to pay tax in retirement, holders of unfunded public sector funds (such as the NHS or police) must transfer their pensions by 30 January 2016
- Wider range of investment options – you can consider investing not only in shares, cash and fixed interest but also property
- Transparency of fees – superannuation funds in general are a very transparent vehicle with respect to fees
- Flexibility of income – you have the power to choose between 4% and 10% in pension income each year
- Keep it local – manage your assets within the same time zone and country in which you’re living
- Eliminate long term currency risk – if your pension is paid from the UK, the amount you receive in regular payments is subject to the fluctuations in the value of the pound to dollar conversion i.e. if the value of the Aussie dollar goes up, the money in your pocket goes down when you access
- Succession planning – the Australian system offers far superior benefits to children and other beneficiaries compared to the tax heavy UK pension system
Sure, there are also disadvantages to transferring your pension fund, and it is important that you take independent advice specific to your circumstances before making any decisions.
Who can help me?
It can be a minefield trying to navigate the pension transfer journey on your own.
bdhSterling is the leading specialist in UK pension transfers to Australia. With offices in both the UK and around Australia, we can help at any stage of your financial journey and provide advice on how to set yourself up for financial stability in your adopted country.
As part of the change in legislation in April this year, any UK defined benefit scheme now requires licensed UK financial advice – something bdhSterling can help with.
Our team is qualified to help clients in all aspects of their financial migration from one country to another. We understand the urgency of this unique opportunity to strike while the iron’s hot and can act for our clients to make sure they settle within the looming deadline.
With bdhSterling’s advice, you can progress your pension transfer application and release these funds and continue the planned direct or indirect transfer of your pension to Australia, depending on your age.
We have created a free UK Pension Transfer Starter Kit to give you some information on this process.
What are the timelines?
6 April 2015
- A transfer ban came into effect for all ‘unfunded’ public sector pensions (e.g. NHS, police etc)
- Basically, your money was ‘stuck’ in the UK
1 July 2015
- The UK removed all bar one Australian superannuation fund from the approved list
- All UK pension transfers to Australia were suspended, including those in progress
1 September 2015
- The UK added an SMSF with (Q)ROPS designation as one of the first Australian additions to the approved list
- People with ‘unfunded’ public sector pensions essentially have their funds ‘unlocked’ and now have the opportunity to continue their transfer application
Mid January 2016
- Last chance to lodge papers in Australia with bdhSterling – we need to allow time to courier original documents to the UK before the 30 January deadline
- If you haven’t started the process by now, you have missed the boat!
30 January 2016
- Deadline for all eligible UK pension transfers
How do I get started?
What’s the nitty gritty?
This blog post has been written to try and simplify what can otherwise be a complicated explanation of the process of transferring your UK pension to Australia.
To find out the nuts and bolts of the process and investigate your options further, please visit the resources page on our website and download a Pension Transfer Starter Kit.