UK Pension Transfers Post 6 April 15 - Questions

This thread is for members to ask questions that are worried/concerned they may be caught up in this unfortunate situation (UK Pension Transfers to Australian QROPS):

http://www.pomsinoz.com/forum/money-finance/235043-important-uk-pension-transfers-post-6-april-15-a.html

Regards

Andy

Hi Andrew,

I have absolutely zero knowledge of pensions. I'm currently paying into a stakeholder pension on salary sacrifice. What are my options to transfer this when I make the move? Or would you suggest I just keep it 'alive' in the UK (if that's possible).

PS. If you could write your reply for a target audience of 5 year olds then I might just about get my head around it!

Thanks.

Hi Andy. I am a little worried I may be caught in this situation. The first I knew about the changes in the rules for QROPS transfers was when I reviewed the Poms in Oz monthly news letter this morning so thanks for that information.

We have been in Oz for over 3 years and as we have settled in well and it looks like are are here to stay I thought it was time to transfer my small Prudential personal pension.

Towards the end of last year I met with a financial advisor who was recommended by our mortgage broker and together we decided to start the transfer. I chose to go with the QROPS fund recommended by the advisor (IOOF) and I filled in all the required paperwork and sent the paperwork to Prudential.

The Prudential eventually made the transfer (after many phone calls and letters). The funds hit the Austrilain fund around 9th June.

So although the transfer was initiated well before the change in the rules (which no one knew about) the transfer was completed after the 6th April deadline.

Do you have any thoughts on how these rules may affect me and others and do you think they maybe some leeway given for transfers which were initiated before the changes but finalised after the changes.

many thanks,

Nick.

This thread is for members to ask questions that are worried/concerned they may be caught up in this unfortunate situation (UK Pension Transfers to Australian QROPS):

 

http://www.pomsinoz.com/forum/money-finance/235043-important-uk-pension-transfers-post-6-april-15-a.html

 

 

Regards

 

Andy

To be clear can you confirm my understanding that there is nothing at all to be concerned about with this rule change if you have no intention of drawing your Super before the age of 60.

Hi Andrew,

I have absolutely zero knowledge of pensions. I'm currently paying into a stakeholder pension on salary sacrifice. What are my options to transfer this when I make the move? Or would you suggest I just keep it 'alive' in the UK (if that's possible).

 

PS. If you could write your reply for a target audience of 5 year olds then I might just about get my head around it!

 

Thanks.

Hi CaptainC

Firstly it is possible to keep it 'alive' in the UK.

Your options unfortunately at this stage are quite limited due to there being essentially no super funds on the new UK Recognised Overseas Pension Scheme (ROPS) list (there is 1 which is a QLD local government scheme which is not public offer).

If going forward Australian Schemes and HMRC work out a solution for Australian Super Funds to become ROPS it may then be possible to transfer it to Australia when you move here.

Regards

Andy

Hi Nick

You raise a good question and many others will be in this unfortunate situation/mess.

I strongly hope that HMRC see sense and allow relief for post 6 April transfers, it has been suggested that relief may apply and there are bodies lobbying for this on behalf of people in this situation although at this stage I cannot confirm this.

Please keep your eye on the main thread and I will update once known.

KR

Andy

To be clear can you confirm my understanding that there is nothing at all to be concerned about with this rule change if you have no intention of drawing your Super before the age of 60.

Hi Ggs

So as I know some of your situation from previous posts ie currently consolidating DC schemes to SIPP the impact is at this stage a transfer of this SIPP to Oz is unlikely to be able to go ahead (see post 5 re only 1 fund on ROPS list).

Is this what you are referring to in your question?

KR

Andy

Hi CaptainC

 

Firstly it is possible to keep it 'alive' in the UK.

 

Your options unfortunately at this stage are quite limited due to there being essentially no super funds on the new UK Recognised Overseas Pension Scheme (ROPS) list (there is 1 which is a QLD local government scheme which is not public offer).

 

If going forward Australian Schemes and HMRC work out a solution for Australian Super Funds to become ROPS it may then be possible to transfer it to Australia when you move here.

 

 

Regards

 

Andy

Thanks Andy.

I will check with the pensions administrator and see if I can just keep it valid until such time I can move it.

Hi Ggs

 

So as I know some of your situation from previous posts ie currently consolidating DC schemes to SIPP the impact is at this stage a transfer of this SIPP to Oz is unlikely to be able to go ahead (see post 5 re only 1 fund on ROPS list).

 

Is this what you are referring to in your question?

 

 

KR

 

Andy

Thanks for the reply Andy. Yes, indeed, we are in the process of consolidating our former employer Group Personal Pension into a SiPP. We probably would not have got around to transferring for a few months anyway so whilst this issue (for us at least) is a troubling development I am sure that a solution will be found to ensure that providers will have compliant schemes of a sort available at some point (though choice may be severely restricted I guess). If not then perhaps ROPS under different jurisdictions could be an option.

I will watch with interest but than you for the heads-up.

David

This thread is for members to ask questions that are worried/concerned they may be caught up in this unfortunate situation (UK Pension Transfers to Australian QROPS) Andy

Hi Andy

I don't wish to appear dim but..........that link went pretty much over my head!

So can I ask a basic and silly question please:

I was born in the UK and worked there from 1986 to 1991.

I didn't actually do a tax return during that period because I was a teenager and didn't know about them (no-one told me) and the tax office never sent me a letter either. So I was none the wiser until a few years later when I accidentally found out about them. Embarrassing but true!

Obviously in my jobs I paid tax and National Insurance contributions; guessing I paid the full rate.

I doubt I would be eligible for a British pension, as I didn’t work there long enough. But I am wondering if I can claim back the National Insurance contributions that I did make?

Perhaps it doesn’t work like that?

Maybe wishful thinking on my part I know.

I found this online:

http://www.britishpensions.org.au/enquiry-form.pdf

http://www.britishpensions.org.au/enquiry.htm

Worth sending off??

Hello

That's fine, the link is actually in relation to UK private pensions.

What you are referring to is the UK State Pension, essentially this cannot be transferred as a lump sum but a person is able to take the pension income from the UK when they get to State Pension Age.

Based on what you are saying you would have accrued from around 5 qualifying years.

Currently this would give you a pro rated amount of around 16% of the full basic state pension however from April next year a new single tier state pension comes into play and a minimum of 10 qualifying years is required to get anything and to get the then full amount 35 years is required.

Firstly I would suggest that you apply for a forecast (form attached) to ascertain how many years you have, once this is done consider paying voluntary contributions to top up missing years which is possible at this stage based on class 3 contributions you may be eligible to pay class 2 contributions but would have to apply to be accepted for this.

Remember that 10 years minimum will be required from next year however it is possible to backdate voluntary contributions for a number of years.

Hope this helps.

State Pension Forecast Application BR19.pdf

State Pension Forecast Application BR19.pdf

Hi Andrew

My husband and I are planning on moving to Australia in February next year and want to take our pensions with us. We are 30 years old and have been contributing to pensions for approx 4 years - these are both private pensions (I think - with Scottish Widows and my husband's company). We are South Africans who have been living in the UK for the last 5 years. Is it possible to transfer these to an equivalent Australian 'pension' without suffering huge tax right offs?

Many thanks in advance

Hi bronwen

Apologies in the delay coming back to you.

Unfortunately at this time it is not possible to transfer UK Pensions to Australia directly for people under age 55 (theoretically it may be but a 55% tax charge would apply).

This is due to legislation changes made by HMRC in April of this year, we are unsure of whether there will be an under 55 solution going forward, if there is we are still a long way off from seeing this I believe.

Kind regards

Andy

Hi Andy, has there been any further progress on the transferring of these pensions? I am about to receive my immediate military pension but wonder whether it's better where it is or sending over.....is this then devolving Article 17 HMRC (I came across this during research into taxation) identifies an agreement regarding taxation in either but not both countries! That's if it can even be contemplated for overseas transfer via (Q) ROPS????

As far as I know JJB your NI contributions just sit there until you claim the pension in Australia then you have to notify the pensions office in the UK who will sort out the very small pension you will receive from the UK before you can claim your Australian pension. I think that's how it works.

*edit*

I've just seen that Andrew has best explained it to you.

Hi Andy

i have been in Oz for 10 years and just found out that I have a small amount in a pension fund with Santander (c.£12k). I take it from reading the various posts that it's not a simple task of moving it over to a fund here. So am I best to just leave it in the UK until I hit retirement age? It's not much but if i'm owed it....! I'm 37 now.

thanks

Ellie

Hi Andy, has there been any further progress on the transferring of these pensions? I am about to receive my immediate military pension but wonder whether it's better where it is or sending over.....is this then devolving Article 17 HMRC (I came across this during research into taxation) identifies an agreement regarding taxation in either but not both countries! That's if it can even be contemplated for overseas transfer via (Q) ROPS????

Hi Branksies

My apologies for the delay.

You have probably found this out by now but I believe that the Military Pension is an unfunded scheme in which case from 6 April 15 government unfunded defined benefit schemes can no longer be transferred out to schemes that offer flexible benefits.

This means that any scheme that is investment linked (most personal schemes are nowadays) will not be able to accept these types of transfers in.

Hope this helps.

Andy

Hi Andy

i have been in Oz for 10 years and just found out that I have a small amount in a pension fund with Santander (c.£12k). I take it from reading the various posts that it's not a simple task of moving it over to a fund here. So am I best to just leave it in the UK until I hit retirement age? It's not much but if i'm owed it....! I'm 37 now.

thanks

Ellie

Hi Ellie

Unfortunately at the moment it is not possible to transfer a UK Pension directly to Australia for anyone under the age 55 unless that person works for the Australian government and is a member of either the Public Sector Superannuation Accumulation Plan or Local Government Superannuation Scheme (QLD).

Kind regards

Andy

Hi I'm new to this forum. My UK pension was sent over on 13/4/15. But my Australian Fund say they only received it around 11/5/2015. Is this normal to have such as delay in sending money over?

Hi maj

This does seem quite a long time but is possible especially if a cheque was sent.

Thanks. I've just found out that my fund was sitting on the money for a month in an unallocated fund, so i reckon i'm due a months interest on around $335k. I'm however, having an uphill battle with my fund here. My British pension confirms it sent the money on 13/4/15 and it apparently arrived in Aus on 17/4/15. The fund here says it's putting together my case to submit to hmrc but frankly i don't trust them. The first i found out about all of this was from a letter they sent dated 11/12/15 saying the fund was non compliant and that i could have to pay the tax bill out of my own money, not the pension. My financial adviser says not to worry, nothing will eventuate but how does he know! I, myself, have provided him with various dates etc from my correspondence with Prism Expats in London who facilitated the transfer. The hmrc have given me an email for me to submit my own case: regulations.qrops@hmrc.gsi.gov.uk

By the way, the PSSAP - Public Sector Superannuation Accumulation plan - is on the recognised ROPS list - I am with them also - but they are not accepting any transfers. In fact they're actively trying to get themselves off the list.

I guess my question to you is:

should i submit my own case direct to hmrc?

what happens to my money sitting here in a non compliant fund? and how do i go about putting it in a compliant fund? I'll be 52 this year.

I am so worried about this, am incredibly stressed about it all.

Many thank

Hi maj

My apologies for the delay.

Thanks for the information about PSSA that is interesting.

In regards to your questions.....is the super fund in question the or part of BT SuperWrap?

I personally think it would be better to wait until the super fund has submitted the information to HMRC as there is data HMRC have asked the super funds to provide that only they will be able to answer (unless they are willing to provide you with that information (ie the date that the scheme received HMRC's initial letter informing them of the pensions age test changes and asking to confirm that there are still compliant).

If relief is granted then people's monies that were transferred into essentially non compliant funds will be fine to remain there without further issue (transferring to a compliant fund is unlikely now to help and in any event probably not possible given you are below age 55 thus no compliant fund exists (outside of the few government schemes).

Regards

Andy

Hi Andrew,

Just looking into the possibility of transferring my UK pension over to Aus, now that I've been here for a year. From what I read, it seems that being under 55 that I have no chance of being able to move my money - do you know why 55 is used as the age when I can do this? And also, do you foresee this situation changing anytime in the near future? I'm happy enough to let my funds sit in the UK, but just concerned that in the next 25 years I'll forget all my account details and log ons!!

Thanks in advance,

Alex

Hello Alex

It's 55 for Australian (QROPS) Funds (except a couple of government schemes not open to the public) as this is currently the only way that they can fall in line with UK legislation introduced last year known as the 'Pensions Age Test'.

Whether an Australian under 55 solution will come about remains to be seen it will be quite tricky to manufacture one that's for sure.

For now keep your fund up to speed with your current contact details.

Regards

Andy