DAN135 Posted May 24, 2015 Share Posted May 24, 2015 We have been in Aus for 2 years and are still enjoying life here but it doesn't feel like home and we may consider moving back in 3-5 years. Is it worth putting $20k per year into a super fund here for our remaining years? The interest rates on savings and term deposits are poor. Any other strategies people would suggest in this situation? Moderate/ high risk investments? We are young (31 and 30) so can tolerate a degree of risk. Is the a financial penalty when the money is paid back to us in the UK at retirement age? Ie Do we have to pay tax twice? Having no idea at all what the exchange rate would be in 30 years time is also worrying. Thanks in advance Link to comment Share on other sites More sharing options...
NickyNook Posted May 24, 2015 Share Posted May 24, 2015 Not really sure what you mean - you don't get a choice about whether money is put into super for you. It's the law, every employer must pay into a super fund for their employees. Are you really asking whether to put extra money in? i.e. Over and above the flat 9.25% that employers must pay? Returns on super can be whatever you want them to be. You can opt to play safe and go with a low rate of return - much like a bank term deposit or cash rate. Or you can opt to have your super invested elsewhere with a higher risk but with potential higher returns. It's entirely up to you to decide how much risk/return you want. Currently all withdrawals from super (once you're past retirement age) are tax-free in Australia. So the only tax is the 15% paid on contributions and earnings within the fund. There's talk that people with high super balances (read multi-millions) may be taxed on withdrawals but it doesn't happen at the moment. Note that the situation is not the same if you're living in the UK at the time of withdrawal, as the UK will tax it as income. It's only tax-free in Australia. Link to comment Share on other sites More sharing options...
DAN135 Posted May 25, 2015 Author Share Posted May 25, 2015 I am an independant contractor so no employer contributions for me. I have to choose a fund and pay the entire amount myself. Your reply did clarify things a bit for me though, thanks. I just can't decide whether I should keep saving up the cash for if/when we return home or whether to invest it in Super for a few years before we leave, knowing we won't see it for another 30 years! Link to comment Share on other sites More sharing options...
MARYROSE02 Posted May 25, 2015 Share Posted May 25, 2015 Whether you live in Australia, the UK, or anywhere else in the world, you will almost certainly need to save for your retirement, so saving for five years in Australia would probably be a good thing. I don't know if it would be better to leave the money in Australia, or take it back to the UK. I have one pension fund paying out from the UK, and one from Australia. Link to comment Share on other sites More sharing options...
scuffythetugboat Posted May 25, 2015 Share Posted May 25, 2015 Get some proper advice before you make any decisions. I am quite sure that if an account is inactive for a period it gets frozen and is then taken into the care of the government. Check it out. Link to comment Share on other sites More sharing options...
newjez Posted May 25, 2015 Share Posted May 25, 2015 Get some proper advice before you make any decisions. I am quite sure that if an account is inactive for a period it gets frozen and is then taken into the care of the government. Check it out. Depends what you mean by inactive. I haven't paid into my super fund for years, but I manage it actively online from the UK. Link to comment Share on other sites More sharing options...
Gbye grey sky Posted May 25, 2015 Share Posted May 25, 2015 If you are expecting to retire in the UK I believe it would make far more sense to contribute to a UK pension fund bearing in mind that 25% of the final amount is tax free and there is now much more flexibility with managing your pension fund. Bear in mind also that should things change in the future and you choose to retire in Australia then under current rules you could transfer your UK SIP to Super using a QROP. Aussies Super is very much locked in. Link to comment Share on other sites More sharing options...
le petit roi Posted May 27, 2015 Share Posted May 27, 2015 Depends what you mean by inactive. I haven't paid into my super fund for years, but I manage it actively online from the UK. A supplementary question on this. Does anyone know if it is possible/permitted within the current legal framework to pay into an existing Aus Superfund when resident in the UK? If the fund isn't topped up occasionally the value of the fund will be greatly reduced when retired due to fees and costs being deducted annually. It makes sense (to me anyway) to at least maintain the funds value through additional overseas contributions which offset the fees and costs. If my experiences to date are to be used as a guideline, Australia being Australia, although professing to have free movement of capital, probably have financial restrictions on this issue which appear to be Foreign Exchange Controls in all but name. :biglaugh: Link to comment Share on other sites More sharing options...
Gbye grey sky Posted May 27, 2015 Share Posted May 27, 2015 A supplementary question on this. Does anyone know if it is possible/permitted within the current legal framework to pay into an existing Aus Superfund when resident in the UK? If the fund isn't topped up occasionally the value of the fund will be greatly reduced when retired due to fees and costs being deducted annually. It makes sense (to me anyway) to at least maintain the funds value through additional overseas contributions which offset the fees and costs. If my experiences to date are to be used as a guideline, Australia being Australia, although professing to have free movement of capital, probably have financial restrictions on this issue which appear to be Foreign Exchange Controls in all but name. :biglaugh: My OH had always suggested that she wanted to do this but I recommended not to. This is principally because you get tax relief on contributions to a UK pension but you lose that substantial benefit if you pay in to a Super fund while earning in the UK. Now we are moving the plan is to transfer her UK pension over so she will be getting the best of both worlds essentially. I sometimes wonder if it is a bit of an urban myth about Super being eaten up by charges. My OH has only a small amount with Australian Super yet it has grown steadily in most years since she left in 1997. She reckoned it was worth less than $4,000 in 1997 as she only worked there for 5 years and made no contributions of her own and it is now worth $30,000 without any contributions. Current admin fees are $78pa. If you are paying substantially more than this perhaps consider switching provider. Link to comment Share on other sites More sharing options...
newjez Posted May 27, 2015 Share Posted May 27, 2015 A supplementary question on this. Does anyone know if it is possible/permitted within the current legal framework to pay into an existing Aus Superfund when resident in the UK? If the fund isn't topped up occasionally the value of the fund will be greatly reduced when retired due to fees and costs being deducted annually. It makes sense (to me anyway) to at least maintain the funds value through additional overseas contributions which offset the fees and costs. If my experiences to date are to be used as a guideline, Australia being Australia, although professing to have free movement of capital, probably have financial restrictions on this issue which appear to be Foreign Exchange Controls in all but name. :biglaugh: My Australian super is double the value I left it at ten years ago. Fees aren't that bad. Link to comment Share on other sites More sharing options...
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