monthly transfer of UK state pension

[surfersj]

As an expat pensioner retiring in Australia, I understand that it is generally financially beneficial to use a foreign currency exchange specialist such as Moneycorp to transfer regular monthly sums from a UK bank account to my Australian bank account i.e. with regard to exchange rate and fees etc. However although this may certainly be the case with regard to a private pension, does the same advantage apply to monthly transfer of the UK state pension? I believe that the UK government will pay my state pension directly into an Australian bank account and may have more favorable exchange rates than what the high street banks would charge me.

So, is my understanding correct that transfer of random lump sums and monthly private pensions are better with someone such as Moneycorp, but I would be better off letting the UK government pay my monthly state pension directly into my OZ bank account?

[Celt Down Under]

Mine gets paid directly to my Australian bank account. I get the rate of exchange on the day of transfer, which of course can fluctuate month to month.

[surfersj]

Hi Celt Down Under, many thanks for your prompt reply. Be great if I could quiz you a little bit more! Does your OZ bank charge you a handling/receiving fee for each monthly state pension transaction that is then deducted from your pension payment? Or perhaps there is a fee but it is accepted/paid by the UK government? I read for example on the NAB website that there is a $15 charge for receiving an amount from overseas. With regard to your rate of exchange, would you be aware how this compares to the rate on the currency market, and rates from currency specialists and UK High St banks? For example if the $ to £ were 2.14 on the currency market, hypothetically, a currency specialist may give you 2.12 and the High St may only give you 2.04 What rate did you get on your most recent pension transfer? Besides this, I guess one of the benefits of using a currency specialist to transfer the state pension from your UK bank account (if you keep one open) to an OZ bank account is that you could lock in to a forward contract for 2 years to avoid being exposed to currency fluctuations. The bottom line for me is that I am trying to see what solution will provide me with the maximum $ in OZ for transferring my UK state pension, my private pension and my wife's UK state pension - one large monthly transaction with a currency specialist versus only doing this with my private pension and letting the UK government pay both of our state pensions directly into our OZ bank account.

[Marisawright]

Do you need to have access to all the money every month, or do you have other funds?

 

If you're not waiting with bated breath for your next pension payment each month, then I'd say the best option is to have the money paid into your UK bank account, and then transfer lump sums as and when you need through Moneycorp. I had some hassles getting the Moneycorp account set up, but now that's done, the process is very easy and painless! If you join Moneycorp through these forums, then you get fee-free transactions which are going to be at a better rate than anywhere else. The British government isn't going to get a better deal - I suspect all they will do is get their bank to transfer it to your bank, with whatever fees are attendant on that transaction.

 

It is always best to retain your UK bank account - though it would be wise to move to an account that doesn't charge fees, of course.

[Bungo]

Hi Celt Down Under, many thanks for your prompt reply. Be great if I could quiz you a little bit more! Does your OZ bank charge you a handling/receiving fee for each monthly state pension transaction that is then deducted from your pension payment? Or perhaps there is a fee but it is accepted/paid by the UK government? I read for example on the NAB website that there is a $15 charge for receiving an amount from overseas. With regard to your rate of exchange, would you be aware how this compares to the rate on the currency market, and rates from currency specialists and UK High St banks? For example if the $ to £ were 2.14 on the currency market, hypothetically, a currency specialist may give you 2.12 and the High St may only give you 2.04 What rate did you get on your most recent pension transfer? Besides this, I guess one of the benefits of using a currency specialist to transfer the state pension from your UK bank account (if you keep one open) to an OZ bank account is that you could lock in to a forward contract for 2 years to avoid being exposed to currency fluctuations. The bottom line for me is that I am trying to see what solution will provide me with the maximum $ in OZ for transferring my UK state pension, my private pension and my wife's UK state pension - one large monthly transaction with a currency specialist versus only doing this with my private pension and letting the UK government pay both of our state pensions directly into our OZ bank account.

 

I would be surprised if the good UK taxpayer should be paying for you to transfer your funds to Australia? Accordingly, I would not expect that your bank fees would be paid.

 

In your shoes, I would be having everything paid into my UK accounts and would then transfer it as and when required. As for forwqrd contracts, these are pretty expensive and binding, so even if the rate goes the other way you are stuck. Only an option would be non binding, but then the costs on these are even higher still and would probably negate any perceived savings. To be honest, considering you appear to know very little about transferring money overseas, dabbling in derivatives is a fool's game.

[surfersj]

Cheers Bungo! Good job I am getting all this good advice on Poms In Oz, particularly the tip on forward contracts. I reckon your assumption on UK Govt not paying fees is spot on, especially when considering the pathetic treatment of UK expats having their pensions frozen in OZ. Maybe I should move to Benidorm:laugh: