For Australians living in the UK, enjoying long-term financial security in retirement is undeniably important, and it sits at the heart of effective retirement planning.
You’re likely to have a mix of retirement savings, including UK pensions and Australian superannuation, along with other assets.
Understanding how these systems interact, along with the tax implications in both countries and other factors, such as currency risk, is essential.
However, you also need to consider non-financial issues, as retirement could become a major portion of your life. It’s a good idea to have a clear plan for how you will spend your time and to create the sense of purpose you need to enjoy a fulfilling life.
Being an expat, or spending time living between two countries, adds another dimension to that.
Read about some of the key non-financial considerations you need to think about as part of your retirement planning.
Finding purpose in your retirement
Perhaps the biggest upheaval you will need to plan for is the transition from work to a life of leisure.
A good starting point is to appreciate everything that work gives you, beyond the obvious one of a regular income.
This will include:
- A structured routine
- The balance in your lifestyle between working and leisure
- Social interaction with a group of people
- A sense of achievement.
Perhaps most importantly, work often helps define who you are. Because of that, when you finish working, it’s understandable that you may feel a loss of identity or direction.
Without the clear divide between workdays and weekends, time can feel very different in retirement.
Because of this, your retirement planning should include considering how you will spend your days and what you will do to maintain a sense of engagement and purpose.
Clearly, what you do will depend on your personal circumstances. Many retirees continue working on a part-time or consultancy basis, or volunteer for causes they feel strongly about or with organisations local to where they live.
Others use this time as an opportunity to explore new interests, learn new skills, or revisit hobbies that may have been set aside during their working years. Whether it’s taking up a creative pursuit, learning a language, joining a club or group, or developing a new area of knowledge, these activities can provide structure, mental stimulation and a renewed sense of achievement
Maintaining and developing social connections
As well as working out what you will do to replace the time you used to spend working, you may also have to give some thought to replacing the social interaction that work once provided.
Living abroad as an expat can be challenging if many members of your family circle remain in Australia. Work may have given you a handy shortcut to a ready-made group of people, especially if you work for an Australian company along with other expats in the UK.
However, when you stop working, that social group may no longer be readily accessible, so you may need to look elsewhere.
Retirement can either strengthen or weaken your social network, depending on how you approach it. Because of that, you’ll need to give some thought to your post-retirement activities.
Positive steps that would help expand your network could include charitable work, joining local societies, and exploring new hobbies that would help you make contact with like-minded people.
You may also want to think about spending time reconnecting with family and friends in both the UK and Australia.
Approached positively, retirement can actually expand your social circle, rather than shrink it.
Planning your retirement lifestyle
As retirement approaches, you are likely to start having an idea of the sort of lifestyle you want to lead.
It’s important to appreciate that this is likely to change during your retirement. You will probably have plans to stay active initially, with overseas travel high on your “to-do” list as you tick off items on your bucket list.
However, while you may remain physically fit, it’s inevitable that as you get older, you will look to enjoy a slightly less active lifestyle, and your planning should reflect this.
As an expat in the UK, you will need to consider other factors, such as whether the lifestyle you want to pursue involves staying in the UK or returning home, or even splitting your time between the two countries.
Much will depend on the lifestyle you desire and the strength of your attachment to the UK.
Deciding where you want to live
Housing is another non-financial factor that you should give some thought to as part of your retirement planning.
Beyond the obvious financial implications, factors such as downsizing, relocating, or adapting your home to future needs can significantly affect your comfort and independence.
You will also need to consider other issues, such as accessibility and proximity to your family and key amenities. These can often have a greater bearing on your lifestyle and wellbeing than the size or value of the property itself.
These issues will be accentuated and will require careful planning if you intend to move between the UK and Australia during your retirement years.
Thinking about your legacy
Much of your legacy planning will involve financial decisions about the assets you want to pass to your beneficiaries and ensuring these transfers are done as tax-efficiently as possible.
However, legal and administrative planning also plays a role beyond finances. You will want to ensure that your affairs are in order. This will give you valuable peace of mind and reduce the future burden on loved ones.
For expats, it’s particularly important to address any cross‑border issues, especially if you hold assets in both the UK and Australia.
Review your plans regularly
Retirement should be viewed not as a single event, but rather as an ongoing period that could last decades. Your needs and priorities will evolve, and your planning process should reflect that. Your plan will also need to account for the challenges of being an expat, potentially with cross-border assets and family and friends in two countries.
With a flexible plan that you can review regularly, you’ll be able to adapt to your changing circumstances.
Get in touch
Expert advice and regular reviews of your plans can help ensure that you are best positioned to achieve your long-term goals.
At bdhSterling, we specialise in helping clients navigate the complexities of international financial planning and plan for the retirement you’ve worked hard for.
If you would like to discuss your own retirement 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.