Stay at home mum pension transfer

[Pommy Mummy]

Hi,

 

I am feeling very confused, angry and worried and wonder if anyone can clarify the implications of changes to UK changes for pension transfers please?

 

I am a permanent Australian resident and fully intend on retiring in Australia (many years in the future). I have a six month old baby so have had many things other than my pension on my mind. My husband and I have only just found out about the new rules for transfers of unfunded pension schemes from the UK and I am feeling panicky (husband less so which makes me feel worse!).

 

We we both have a Teachers Pension in the UK (mine with about 5 years service and his about 10). My husband is in the very early stages of transferring his across (himself) and I am unsure if I can transfer mine at all as I don't currently have a Super fund (as I am a stay at home mum).

 

My questions are: Can we transfer our pensions and if so should we? Do I need a Super to transfer to and is it possible to open one whilst on a career break? If we can't transfer what does this mean for us in the future? I am worried my meagre pension will be eaten away by tax in the future.

 

I really appreciate any any input as this is scary stuff. I am feeling very hard done to about this right now!

 

Thanks

[Gbye grey sky]

Firstly there is not a ban on transferring the unfunded pension abroad per se but a ban on transferring into a contributory pension scheme such as a SIPP. You would need to do that before transferring it to a Super Fund and that last part can happen after April.

 

That said many people are better off leaving things as they are and a small pension pot such as yours is likely to be decimated by all the costs associated with transferring it over. Similarly with your husband.

 

Unless you are expecting to have a high level of other income in retirement I don't think you should concern yourself too much with tax as your pension is almost certain to fall below the taxable threshholds.

 

I have a Civil Service pension (30 years service) and plan to retire in Oz. I paid for advice and a report but I suspect that would not be worthwhile for your circumstances. Even with the future tax advantage for me the outcome was distinctly marginal so I decided to leave things as they are.