Pensions - to transfer to Aus or not to transfer to Aus?

[AusDi]

Hi! I am thinking of moving my British pension over to Australia and wondered if anybody has done this or if they have left it to claim from the UK when they hit retirement age? Benefits to leaving it in the UK are security of other pot. Negatives are if I then claim it from UK when I am older, I will be taxed on it by Aus. What works out better? Middle man company Alexander Beard want to take 3% of it now, but then no tax by Aus later and can invest it in a super here. What have people done? Who have they used? Any other pros and cons people can see? Have people used Alexander Beard? Thanks very much PomsInOz crew XXXX

[Guest The Pom Queen]

I am going to move this thread in to Andrew Williams forum as he is an expert on these matters and the most qualified to advise on here.

[Andrew from Vista Financial]

Hi AusDi

 

 

I think that you are probably looking for opinions from other members as to what they have done with their pensions but I will certainly give my comments to try and help.

 

I'm sure that you'll find a mixture of answers, from people that have transferred their Pension due to various reasons they feel was appropriate to them or that have left them in the UK for various reasons they feel appropriate to them through to some that either haven't gotten around to it or haven't even given it a second thought.

 

Whether or not to transfer will basically be down to a wide variety of factors and ultimately there is no definitive right or wrong.

 

Things like:

 

 

• Type of Pension - defined benefit or defined contribution (I'm assuming yours is defined benefit AKA final salary) when you say security of pot;
  
• Visa type - permanent or temporary;
  
• How long you have been in Australia - I generally suggest that people wait until they feel it is their intention to remain in Oz before embarking on a transfer;
  
• Retirement goals - what age do you wish to retire at (the age at which you can access your pension may differ in Australia and the UK), flexibility of income requirements in retirement etc;
  
• Attitude to investment risk – If you transfer the pension the monies will have to be invested therefore inflation and investment risk will apply;
  
• Exchange rates - Certainly no right or wrong on this but have to be considered and in actual fact explored further as it is not as black and white as it seems;
  
• Legislation - The Australian Superannuation environment differs to the UK;
  
• Taxation - Yes potentially there could be tax advantages being tax-free income in retirement however this will depend on your level of income as there are still fairly favourable limits in place before tax applies therefore it may not make a difference.
  

 

Therefore if paying a fee for a transfer I would look to ensure that the fee is not just for the services of a middle man as such to facilitate the transfer but more so to advise you of how the above implications and factors impact you and work with you to explain the advantages and disadvantages.

 

They will also give their professional recommendations thus you will be in a better position to make an informed decision.

 

Be prepared to pay a fee for the advice even if you decide not to transfer or the advice is not to transfer.

 

(I am not aware of the services the company you mention offer so cannot comment).

 

I hope this helps you a bit, please also feel free to have a read through this thread that I wrote http://www.pomsinoz.com/forum/pension-transfers-ask-vista/169401-uk-pension-transfers-information-thread.html

 

Kind regards

 

 

Andy

Edited April 24, 2013 by Andrew from Vista Financial