Brit police officer wanting to transfer police pension to Australia

[Devonuk]

Do you mean the Aussie state pension? You get that at 65 is that right? I would presume he wouldn’t get the full amount as not worked his full life there. I know he gets his up state pension too I think. So if he gets a combination of partial police pension, super fund, Australia old aged pension and uk stare pension should be good enough? Unless I’m dreaming thT he would be entitled to all that! 

[Marisawright]

13 minutes ago, Devonuk said:

Thank you I believe the police pension gives him a tax free lump sum, then pays a monthly figure until death. 

In that case, that's much better than superannuation.  Superannuation lasts as long as you take to spend it - if the money runs out before you do, you have to rely on the Aussie state pension.

[Marisawright]

7 minutes ago, Devonuk said:

Do you mean the Aussie state pension? You get that at 65 is that right? I would presume he wouldn’t get the full amount as not worked his full life there. I know he gets his up state pension too I think. So if he gets a combination of partial police pension, super fund, Australia old aged pension and uk stare pension should be good enough? Unless I’m dreaming thT he would be entitled to all that! 

If you can manage to be legally resident in Australia for 10 years before retirement age, then you'll both be entitled to the full Australian state pension.   However, it is means tested, which means you don't get it if you've got enough assets to live on.  In practice, if you have a partial police pension, a partial UK state pension, superannuation and savings, you may never qualify for much of the Australian state pension - but it's good to have it as a safety belt if you live to 100 and the money runs out.

[Devonuk]

That makes sense, thank you! Your very knowledgable, it’s incredibly helpful! 

[MicknMary]

Thanks  for your help Andrew, that's very useful.

I'll go back to my tax agent, but I'm not sure how I would calculate the increase in value from when I became an Aus resident to when I received my lump sum, I'd have to go back to the NHS Pension Scheme and ask them.

 

[Andrew from Vista Financial]

39 minutes ago, MicknMary said:

Thanks  for your help Andrew, that's very useful.

I'll go back to my tax agent, but I'm not sure how I would calculate the increase in value from when I became an Aus resident to when I received my lump sum, I'd have to go back to the NHS Pension Scheme and ask them.

 

No problem. As a deferred member your benefits would have increased by indexation each year, it should be fairly easy to get an idea of what the historic benefits were particularly if it was only a couple of years.

[Andrew from Vista Financial]

16 hours ago, Devonuk said:

Thank you everyone for your massive help. At least I know now he will have to freeze his police pension, he’s been paying into it for 14 years. If he stayed in the job he would be able to retire at 56, but by leaving and freezing it he would access it at 60.

If you started a super fund in oz from age 40 would retiring at age 60 give you much at all or a negligible amount? Would be on a 6 figure salary, 11% super. 

Cause he would get his police pension from the UK at age 60 too. So would get the super and the police. 

Or would he have to work till 65? 

Trying to see whether we’d be better off in retirement staying in uk or going to oz. don’t want to move if it’s going to make us much worse off! Thanks 

 

Hi DevonUK

I've read the following information about you thus far:

• Husband Age = 40

• Salary = $100,000(6 figure please clarify?) – 11% super

• Retiring at age 60 preferably

 

If you are able to provide the following, I'll run it through my calculator (crudely of course):

• UK State Pension – how many years of contributions do you each have?

• How old are you?

• How much is your Husbands Annual Police Pension currently in pounds?

• Are you happy to use the following benchmark for retirement income purposes (ASFA Retirement Standard - https://www.superannuation.asn.au/resources/retirement-standard $60,800)?

 Regards

Andy

[Devonuk]

Hi Andy, appreciate your help. 

Aus salary will be roughly $100000 for husband and $40000 for me. 

I am 35 years old. 

Husband has 22 years NI contributions in UK. I have 15 years NI contributions. 

Husband pays annually about £5000 into his pension and has been paying in for 14 years. 

Happy to use the comfortable retirement benchmark. 

Thank you 

[Andrew from Vista Financial]

Thanks

Wow still very young, and so plenty of time in my opinion to be able to save for retirement in Australia, yet so many things will happen over that period.

Personally I would not be making my decision to move based on this side of things (whether you will be better off in retirement in UK or OZ) as said what the assumed situation is now could be very different when you get to retirement (legislation changes and personal changes will see to that), it's much more about the life that you wish to lead and whether you feel your life will be more fulfilling here in Australia or where you are in the UK.

Anyway still happy to give you a bit of a projection but what I need is your Husbands current Police Pension entitlement (he needs to obtain details telling him what his annual pension entitlements look like if he left the scheme today). 

Also if you are able to get a forecast of your UK State Pension entitlements that will help more, you can do this online here (set up account and get instant forecast (you will need an in date UK passport): https://www.tax.service.gov.uk/government-gateway-registration-frontend?accountType=individual&continue=%2Fcheck-your-state-pension%2Faccount&origin=nisp-frontend&registerForSa=skip

Regards

Andy

[Devonuk]

Andy, thanks for the above and I finally have those figures. 

My husband is 39 years old, would like to retire at 60. 

After research he will be earning $85000 year plus 9.5% superannuation. We will hope to pay an extra 1.5% into the fund also. 

His projection for his police pension in Uk is £9657/ year. This is after 14 years of employment.

his state pension in the UK has been paid in full for 17 years, his annual figure projection for retirement is £8575.55/year. 

I’d hugely appreciate any type of projection you could give for him. 

Thanks

[Andrew from Vista Financial]

Hello Devonuk

Can you email me on Andrew@vistafs.com.au so I can send you these projections, the forum won't allow me to paste them for some reason.

Thanks

Andy

 

 

 

 

 

 

[Devonuk]

I’ve just emailed, thank you Andrew. 

[Andrew from Vista Financial]

Hello Devonuk

 

Here you go I have managed to attach the charts.

Please, please take these projections as a rough guide only, I have not fully justified or analysed them and they are based on the limited information from this thread only.

Firstly the assumptions used are:

• UK and Australian Inflation (the cost of living), wages, tax brackets and Centrelink Age Pension payments and thresholds will all increase each year by 2.5%;
• You will both have Employer Superannuation payments made at 9.5% until retirement;
• Your required annual income in retirement will be $61,000 in today’s money, this will increase with inflation each year to allow for the cost of living increases;
• Your Superannuation Funds will grow at an average of 6% net each year until retirement;
• Your Superannuation Funds will be rolled to Account Based Pensions when you retire;
• Your Account Based Pensions will grow at an average of 4% net in retirement;
• You will draw the minimum legislated amounts from your Account Based Pensions in retirement;
• You will become eligible for the Centrelink Australian Age Pension at age 67;
• You will be eligible to receive the UK State Pension at age 67 and will each receive 50% of the current full amount,
• The UK State Pension will increase with the cost of living until you start to receive payment however once in payment it will remain flat (i.e will not increase with the cost of living);
• You will receive the UK Police Pension at age 60 and the current amount is £9,657 annually (this is indexed by inflation pre and post retirement);
• The rate of exchange between UK and Australia is $1.80 to £1.00;
• In any year of retirement that there is a deficit in income required to meet your expenses you will make a capital withdrawal from your Account Based Pensions. 

 

The first chart shows retirement at age 60 and the second at age 65.

 

Ignore the expenditure objective (orange line) before retirement, this is only relevant from retirement and is the $61,000 annually.

 

This is the current benchmark based on ASFA's research: https://www.superannuation.asn.au/resources/retirement-standard

 

 

 

Edited February 6, 2019 by Andrew from Vista Financial

[Devonuk]

That’s great thanks Andrew. Just a few questions.

Are the above projections joint for me and my husband, or is it just based on my husband only? 

With the recommended $61k a year income for standard of living is that a joint income of $61k or each? 

In the first graph what is the red income by assets? 

My understanding is due to receiving police pension (purple line) and income support (uk and Australian pension totals) we can make the super last a lot longer if we work till 65. 

Also in the first projection, the income support from aged 67 is so much lower as it is means tested and we will still be getting the super? 

It is extremely interesting and a bitter pill to swallow that we will be better off to work the extra 5 years. If we were to stay in uk we would be able to retire at 56. 

Thank you so much, lots to think about, 

 

[Marisawright]

29 minutes ago, Devonuk said:

That’s great thanks Andrew. Just a few questions....

Do bear in mind that Andrew does this kind of thing for a living.  He's already been enormously generous, offering you so much free advice. If you need him to look into this in depth, it might be more appropriate to engage him on a professional basis?