Wanderer Returns Posted January 3, 2015 Share Posted January 3, 2015 Happy New Year to one and all! If you’ve read any of my previous posts you’ll know that my wife and I have just moved back to the UK for family reasons (to help take care of my mum). I am a British and Australian citizen and she is also an Australian permanent resident. I’ve lived and worked in Australia for the past 11 years and lived solely in the UK prior to that. I have paid 21 years NI contributions into my UK state pension and I now have private pensions in both countries of approximately equal amounts. When I come to retire, which I anticipate will be around 67, I should have (for argument’s sake) an income of about £4,000/annum from my UK private pension and something similar from my Australian superannuation. I have also considered transferring my UK private pension into my Australian super, which has performed much better over the years, but I think it might be too late to do that (and aware that there are considerable complications involved). The end of the year always seems to be a good time for reflection and I’ve started to look at the long term implications of retirement. My big question is… Financially will I be better off retiring in the UK, Australia or maybe even another European country? Based on my current financial situation (not that good, but not too desperate either!), retiring to a country where I’ll have the most disposable income will probably be a major factor. I’m thinking that’ll probably be Australia because I can receive my UK pension in Australia (even though it will be taxed), but I won’t be eligible to receive the (somewhat more generous) Australian state pension if I’m living anywhere else but Australia (please correct me if I’m wrong?). I also understand that to receive the Australian state pension I will need to relocate to Australia at least 5 years prior to retirement to be eligible (unless the rules change again). At some point I know I will need to seek some professional advice but for now it would be good to hear from anyone who has personal experience of this. Clearly, reducing the amount of tax I will have to pay across the board will be an important consideration wherever we end up. I accept that any advice given is general and by no means constitutes any kind of legal arrangement! Many thanks in advance for your feedback and all the best for 2015 :-) Martin. Link to comment Share on other sites More sharing options...
scuffythetugboat Posted January 3, 2015 Share Posted January 3, 2015 You do not have to relocate to Australia 5 years before retirement, you have to be in Australia to claim the pension and have been an Australian resident for 10 years or a total of 10 years with one period of at least 5 years. Link to comment Share on other sites More sharing options...
Jacaranda Posted January 3, 2015 Share Posted January 3, 2015 I thought I read on Centrelinks page that to qualify for an Oz pension,you had to have worked atleast the last 10 yrs full time in Oz before retirement?Unless I read it wrong or the info I read is now out of date? Link to comment Share on other sites More sharing options...
scuffythetugboat Posted January 3, 2015 Share Posted January 3, 2015 You have to be a resident. You don't have to work at all. It hasn't changed. Link to comment Share on other sites More sharing options...
Gbye grey sky Posted January 3, 2015 Share Posted January 3, 2015 Not sure why you think it may be too late to transfer using a QROP your UK pension to your Aussie Super or why that would be particularly complicated. Link to comment Share on other sites More sharing options...
Marisawright Posted January 3, 2015 Share Posted January 3, 2015 I’ve lived and worked in Australia for the past 11 years and lived solely in the UK prior to that. I have paid 21 years NI contributions into my UK state pension and I now have private pensions in both countries of approximately equal amounts. When I come to retire, which I anticipate will be around 67, I should have (for argument’s sake) an income of about £4,000/annum from my UK private pension and something similar from my Australian superannuation. I have also considered transferring my UK private pension into my Australian super, which has performed much better over the years, but I think it might be too late to do that (and aware that there are considerable complications involved). My big question is… Financially will I be better off retiring in the UK, Australia or maybe even another European country? Probably another European country. If you stay in the UK, you'll get your full British pension but you can't claim the Australian pension (unless you go back and live in Australia for TWO years at your eligibility date). If you come back to Australia, you'll get your British pension BUT it will be frozen forever (no increases). You will be eligible for a full Australian pension BUT remember that it's means-tested so you may not get it for some time. Here is the calculator to estimate how much you can get: http://yourpension.com.au/APCalc/index.html If you go to Italy, Greece, Spain and most other European countries, you'll get your full British pension AND you can claim the Australian pension. This is the document explaining how it works for Italy, the others are similar: http://www.humanservices.gov.au/spw/customer/information-in-your-language/resources/008/008-1207en.pdf https://www.dss.gov.au/about-the-department/international/international-social-security-agreements/current-international-social-security-agreements/australia-and-italy-frequently-asked-questions Again, remember the Australian pension is means-tested so you may not get it for some time anyway. You can take your Australian super as a lump sum when you reach retirement age but beware, as you might get stung for capital gains. Link to comment Share on other sites More sharing options...
Wanderer Returns Posted January 4, 2015 Author Share Posted January 4, 2015 Thanks to all for the great feedback, in particular to Marisawright - that was brilliant! The problem with transferring my UK private pension into my Aussie super (as I understand it) is that unless it was done at the time I emigrated, I will forfeit 15% of the value of the pension fund. I haven't looked into this too deeply though so maybe I haven't got my facts completely right. It would also mean that I would have a higher Australian income on retirement and that would affect my Australian Age Pension because it's means tested. As I understand it, I would need to be resident in Australia for 10 years in total, with one period of at least 5 years. I'm assuming that you are allowed out of the country to take holidays in that 5 years? Right! Unfortunately I haven't lived in Australia for continuously for that period of time because I was overseas for 2.5 years in the middle of my 11 years, so I have been there for 2 periods of a little over 4 years. Am I right in thinking that I would also need to be resident in Australia for 2 years immediately before making the claim for Age Pension? Having too much money to disqualify me is unlikely to be a problem - I've never been very good at saving! :-) Much as though I love Australia, retiring to a (southern) European country would be appealing - certainly more appealing than retiring in the UK! Thanks again, Mart. Link to comment Share on other sites More sharing options...
Marisawright Posted January 4, 2015 Share Posted January 4, 2015 Am I right in thinking that I would also need to be resident in Australia for 2 years immediately before making the claim for Age Pension? Only if you want to claim the pension in countries that don't have a reciprocal agreement. If you are living in a country that DOES have a reciprocal agreement, it's not necessary to return to Australia at all - you claim from that country and Centrelink even has a form for you to send in: http://www.humanservices.gov.au/customer/forms/aus140 You'll notice there isn't a form for the UK and that's because there is no agreement - so if you want to get your Aussie pension in the UK, you'll have to come back to Oz for the two years. It doesn't have to be two years BEFORE: you can claim on the day you arrive, provided you then stay in the country for two years. Or you can arrive one year before, claim and then stay for a further year, or any other combination - so long as your total period of residence around claim time amounts to two years. Link to comment Share on other sites More sharing options...
Wanderer Returns Posted January 5, 2015 Author Share Posted January 5, 2015 You'll notice there isn't a form for the UK and that's because there is no agreement - so if you want to get your Aussie pension in the UK, you'll have to come back to Oz for the two years. It doesn't have to be two years BEFORE: you can claim on the day you arrive, provided you then stay in the country for two years. Or you can arrive one year before, claim and then stay for a further year, or any other combination - so long as your total period of residence around claim time amounts to two years. Thanks again Marisa. Incredible to think that there isn't a reciprocal agreement between the UK and Australia considering the long standing connection between our countries and the latter being part of the Commonwealth! Link to comment Share on other sites More sharing options...
Marisawright Posted January 5, 2015 Share Posted January 5, 2015 Thanks again Marisa. Incredible to think that there isn't a reciprocal agreement between the UK and Australia considering the long standing connection between our countries and the latter being part of the Commonwealth! If you look on the Centrelink website, you'll find a message that gives the reason. The UK has decided not to index the pensions of Brits who live abroad - which means that you get the pension at retirement age, but you never get any increases. Australia doesn't agree with that and isn't willing to sign a reciprocal agreement on that basis (because that would mean Australians in the UK wouldn't get increases either). Very admirable of them but the result is that Aussies in the UK get nothing at all! Link to comment Share on other sites More sharing options...
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