Finance in older age

[matt796]

Hi. Since moving here it has become apparent that pensions like those some of us were lucky enough to be in were accessible at 55 and were index linked and paid a monthly amount in addition to a lump sum. I was surprised that doesn't exist here and wondered how people manage as they get older? Is it a case of working longer to ensure there is sufficient in their super funds? It has raised some serious questions about staying in Oz long term. Any advice would be appreciated.

Many thanks 

[Marisawright]

I’m not sure those still exist in the UK either.

[Nemesis]

2 hours ago, matt796 said:

Hi. Since moving here it has become apparent that pensions like those some of us were lucky enough to be in were accessible at 55 and were index linked and paid a monthly amount in addition to a lump sum. I was surprised that doesn't exist here and wondered how people manage as they get older? Is it a case of working longer to ensure there is sufficient in their super funds? It has raised some serious questions about staying in Oz long term. Any advice would be appreciated.

Many thanks 

People keep working. Before the government screwed all our plans by refusing my husband's visa, I was expecting to have to work till at least 75, owing to my super being above the threshold for claiming the ozzie pension, yet too small to live on for the rest of my life. 

[Skani]

3 hours ago, matt796 said:

and wondered how people manage as they get older? Is it a case of working longer to ensure there is sufficient in their super funds? 

 

About 70% of over 65's in Australia receive a pension  and around a third of these are part pensions.  Most of the latter would be supplementing  superannuation income.

[Ken]

 

1 hour ago, Nemesis said:

People keep working. Before the government screwed all our plans by refusing my husband's visa, I was expecting to have to work till at least 75, owing to my super being above the threshold for claiming the ozzie pension, yet too small to live on for the rest of my life. 

Australian Super works differently from UK pensions. UK pensions normally pay an index linked annuity (paid for life from the date it starts) and you receive the old age pension at the same time. Australian Super is normally drawn down as required until it is exhausted and then you receive the Age pension (that's the simple explanation it's actually more complicated as to how the Age Pension feeds in as your Super balance falls). You're not actually expected to live on a small amount of Super for the rest of your life but you are expected to use it before you can get the Age Pension.

[Nemesis]

3 hours ago, Ken said:

 

Australian Super works differently from UK pensions. UK pensions normally pay an index linked annuity (paid for life from the date it starts) and you receive the old age pension at the same time. Australian Super is normally drawn down as required until it is exhausted and then you receive the Age pension (that's the simple explanation it's actually more complicated as to how the Age Pension feeds in as your Super balance falls). You're not actually expected to live on a small amount of Super for the rest of your life but you are expected to use it before you can get the Age Pension.

But if you have not lived and worked in oz for long enough then you are not entitled to the oz pension. Also I believe that receiving the full UK state pension can easily push one above the means test threshold for the oz one. Not that its relevant anymore as the immigration department stuffed up all our plans and we will be retiring at home!

[matt796]

Im still in one if i go back to my old job in the UK.  Perhaps that's the only option. 

I will get my partial UK public sector pension at 68 and I'll keep my NI contributions up so that we receive our UK government pensions. It's unfortunate that the UK seems a lot easier to live in later life, especially with the health care etc being covered completely. 

[Skani]

28 minutes ago, matt796 said:

It's unfortunate that the UK seems a lot easier to live in later life, especially with the health care etc being covered completely. 

I have to say as a widowed 72 year old I live a very comfortable life here on superannuation supplemented by part age pension (about a quarter of the total).  It's not an extravagant life but I don't go without anything I need and can do everything I want to do.  Even a part pension is helpful in reducing costs such as car registration, council rates and electricity bills.   Having said that, I do own a home mortgage free:  I would not feel as comfortable at this stage in life if I were having to pay rent on the open market.

 

Edited June 3, 2019 by Skani

[Toots]

2 hours ago, Skani said:

I have to say as a widowed 72 year old I live a very comfortable life here on superannuation supplemented by part age pension (about a quarter of the total).  It's not an extravagant life but I don't go without anything I need and can do everything I want to do.  Even a part pension is helpful in reducing costs such as car registration, council rates and electricity bills.   Having said that, I do own a home mortgage free:  I would not feel as comfortable at this stage in life if I were having to pay rent on the open market.

 

All the oldies I know seem to have a comfortable life.  We retired at 62 and 65.  Most people we know retired at 65.  They seem to forever gallivanting on holidays and a lot of them disappear off to Queensland for the winter.  As you say Skani it helps if you own your own home mortgage free.  We are not on the age pension but if we live long enough I can see the day when we will receive a part pension.  Work hard, save hard and you will have a comfortable old age.

[Nemesis]

1 hour ago, Toots said:

All the oldies I know seem to have a comfortable life.  We retired at 62 and 65.  Most people we know retired at 65.  They seem to forever gallivanting on holidays and a lot of them disappear off to Queensland for the winter.  As you say Skani it helps if you own your own home mortgage free.  We are not on the age pension but if we live long enough I can see the day when we will receive a part pension.  Work hard, save hard and you will have a comfortable old age.

We had two issues - migrating late in life I have a very small super fund, also we owned no property so would have had to downsize and continue paying rent on as small a place as we could get. Maybe immigration did us a favour by effectively booting us out!

Edited June 4, 2019 by Nemesis

[LouDYorkie]

We had two issues - migrating late in life I have a very small super fund, also we owned no property so would have had to downsize and continue paying rent on as small a place as we could get. Maybe immigration did us a favour by effectively booting us out!

Ohh, I hoped you were going to say you were living on it quite happily [emoji46]
As this is our situation too [emoji2372]

[Bobj]

Retired 20 years ago at age 58, on a pension of sorts...Centrelink...until age 60, then Centrelink realised that people over 60 don’t get jobs, so got a pension. Some of my super went into buying shares and quite a hap, hap happy bloke, now...

I urge all of you to make sure you have no debts at retirement age; we were fortunate in that we only had a short mortgage time, 4 years. Ergo, no outstanding debts.

Cheers, Bobj.

[rammygirl]

Yes. I have not worked since arriving and Hubble will not have built up much super.  But he has a good amount in a UK SIPP, which we might transfer. And I have a local gov UK pension that I can draw soon.  We also are mortgage free with savings and investments built up from decades of living within our means.  We have still travelled widely and still do, and live well.  We don’t feel the need for a flashy lifestyle though.

I think my hubbies colleagues though we were a bit eccentric when he was getting big bonuses, not living in a big flashy house or driving the latest flash car etc.  but we didn’t feel the need to do these things and didn’t mix in those circles, preferring down to earth friends.  Keeping up with the Joneses is a mugs game. We used the bonuses to pay down our mortgage.

Not that I am saying you have squandered all your cash, just saying people live differently and have different expectations. 

Being debt free gives you choices, something both my sons have inherited thankfully.

[Paul1Perth]

18 hours ago, Nemesis said:

People keep working. Before the government screwed all our plans by refusing my husband's visa, I was expecting to have to work till at least 75, owing to my super being above the threshold for claiming the ozzie pension, yet too small to live on for the rest of my life. 

Presumably though, if you spend some of your super and get below the threshold the Aus pension will kick in.

Asset test is $387,500 for a couple not counting your home, to receive a full pension.

The income test for a couple living together has to have an income of $3096.40 per fortnight for the pension to stop.

I think that's pretty generous and your super must be worth a lot. 

Go on a couple of holidays, that should fix it.

[Marisawright]

17 hours ago, Ken said:

Australian Super works differently from UK pensions. UK pensions normally pay an index linked annuity (paid for life from the date it starts) 

Australian private pensions used to be like that too (I think they were called 'defined benefit" schemes).  I'm not sure they were index-linked though.  As I understand it, it's no longer compulsory for British pensions to be taken as an annuity either. 

I can see why they've changed it. With life expectancy extending and extending, it must have been getting uneconomic to provide a guaranteed, index-linked pension.  After all, someone retiring at 55 could be retired for as many years as they worked!

[Paul1Perth]

3 hours ago, Bobj said:

Retired 20 years ago at age 58, on a pension of sorts...Centrelink...until age 60, then Centrelink realised that people over 60 don’t get jobs, so got a pension. Some of my super went into buying shares and quite a hap, hap happy bloke, now...

I urge all of you to make sure you have no debts at retirement age; we were fortunate in that we only had a short mortgage time, 4 years. Ergo, no outstanding debts.

Cheers, Bobj.

Close to retirement myself Bob. Would have been nice to retire a lot earlier though. 

I was 65 last December and got a letter from the UK pension office as my UK pension kicked in at 65 and 3 months. Pleasantly surprised with what I got as we emigrated in 92 and didn't pay the extra to get a full pension. I also get some fro. The NCB and Ferranti pension schemes.

My wife has started getting her NHS one too. 

We are both working part time at the moment and it's OK. 

I'm considering pulling the pin altogether soon though as the Aussie pension starts at 65 and 6 months and I've done a few calculations to find we should still get a fair bit, even with super payouts.

My wife is 5 years younger and I keep winding her up as her pension won't be available till she's 67, so I tell her she'll have to work till then

Don't fancy my chances though, she went part time before me and would quit tomorrow.

All the people I know my age have retired. The Aussies amongst them can't get pensions because they have too many assets. They all seem to have bought properties or land years ago when things were cheap. They moan a bit but all seem to have nice houses, caravans, nice cars etc. A lot of them dissappear in their flashy caravans to Ningaloo or somewhere warm for a few months.

Don't know any that appear to be struggling.

[Marisawright]

8 hours ago, matt796 said:

Im still in one if i go back to my old job in the UK.  Perhaps that's the only option. 

I will get my partial UK public sector pension at 68 and I'll keep my NI contributions up so that we receive our UK government pensions. It's unfortunate that the UK seems a lot easier to live in later life, especially with the health care etc being covered completely. 

I'm confused.  When you left your old job, did you lose your pension altogether?   That doesn't seem fair.   If you didn't lose it, then why can't you receive that pension while you are resident in Australia?

You will also claim the UK govt pension, of course.  Again, you can claim that in either country - but in Australia, it will be frozen at the rate you start at.  

Then you'll also have your Australian superannuation - make sure it's all in one fund and you've chosen a good low-cost fund (not just the one your employer dumped you in).   Again, payable whichever country you're in, though it will be subject to tax if you're living in the UK (it's tax-free if you're living in Australia). 

If all of that isn't enough, then you can claim the Australian govt pension if you stay in Australia.   If you go back to the UK you need to have 35 years residency, BUT if you are living in Australia, you only need to have been here for 10 years.  It's means-tested so you should view it as a safety net if and when your other funds run low.

Edited June 4, 2019 by Marisawright

[matt796]

I paid into my UK public sector pension for 16.5 years but the rules changed around 2015 for mine so the only way to get it at 55 is to continue in that job until 55. So if I returned to the UK and my old job (which I can) I'll get it at 55. If I remain here in Oz it will be frozen and paid at my UK state pension age (68 for me). I need to back pay my NI contributions from 2018 and continue that to get my UK state pension. 

It's a toss up of returning to the UK and being able to more or less retire at 55 or staying in Oz but having to work beyond 60. Obviously I'd rather retire earlier. I took the job and pension for granted in the UK & now realise how good it was! 

[Paul1Perth]

43 minutes ago, Marisawright said:

Australian private pensions used to be like that too (I think they were called 'defined benefit" schemes).  I'm not sure they were index-linked though.  As I understand it, it's no longer compulsory for British pensions to be taken as an annuity either. 

I can see why they've changed it. With life expectancy extending and extending, it must have been getting uneconomic to provide a guaranteed, index-linked pension.  After all, someone retiring at 55 could be retired for as many years as they worked!

A friend of mine was made redundant from the housing dept. Last year. He had turned down one redundancy offer and we all gave him stick about that.

He gets a defined pension based on his last years salary. With the redundancy payment and that he's laughing. 

Used to be available to all government employees I think but was phased out a while ago. 

He's not 65 till next year either.

[Bobj]

11 hours ago, rammygirl said:

Yes. I have not worked since arriving and Hubble will not have built up much super.  But he has a good amount in a UK SIPP, which we might transfer. And I have a local gov UK pension that I can draw soon.  We also are mortgage free with savings and investments built up from decades of living within our means.  We have still travelled widely and still do, and live well.  We don’t feel the need for a flashy lifestyle though.

I think my hubbies colleagues though we were a bit eccentric when he was getting big bonuses, not living in a big flashy house or driving the latest flash car etc.  but we didn’t feel the need to do these things and didn’t mix in those circles, preferring down to earth friends.  Keeping up with the Joneses is a mugs game. We used the bonuses to pay down our mortgage.

Not that I am saying you have squandered all your cash, just saying people live differently and have different expectations. 

Being debt free gives you choices, something both my sons have inherited thankfully.

My thoughts exactly, @rammygirl. Enjoy what you have and have what you enjoy. When the weather is fine, I spend most mornings sat on a rock with a fishing rod  and enjoying looking at the Whitsunday Islands. A simple life, that's my philosophy...Why make it complicated by trying to keep up with the Joneses, or worrying about who is going to rule the world?

Cheers, Bobj.

 

[Marisawright]

16 hours ago, matt796 said:

I paid into my UK public sector pension for 16.5 years but the rules changed around 2015 for mine so the only way to get it at 55 is to continue in that job until 55. So if I returned to the UK and my old job (which I can) I'll get it at 55. If I remain here in Oz it will be frozen and paid at my UK state pension age (68 for me). I need to back pay my NI contributions from 2018 and continue that to get my UK state pension. 

It's a toss up of returning to the UK and being able to more or less retire at 55 or staying in Oz but having to work beyond 60. Obviously I'd rather retire earlier. I took the job and pension for granted in the UK & now realise how good it was! 

As Paul1Perth mentions, public sector pensions in Australia used to be the same.  Then they realised how much index-lining was costing - way more than the provisions made - and they got phased out.  

If you've already got 16 years of NI contributions then you'd get some UK pension (it's pro rata). 

[Ken]

On 04/06/2019 at 18:16, matt796 said:

I paid into my UK public sector pension for 16.5 years but the rules changed around 2015 for mine so the only way to get it at 55 is to continue in that job until 55. So if I returned to the UK and my old job (which I can) I'll get it at 55. If I remain here in Oz it will be frozen and paid at my UK state pension age (68 for me). I need to back pay my NI contributions from 2018 and continue that to get my UK state pension. 

It's a toss up of returning to the UK and being able to more or less retire at 55 or staying in Oz but having to work beyond 60. Obviously I'd rather retire earlier. I took the job and pension for granted in the UK & now realise how good it was! 

Can you get your old job back when you're 54 years 11 months and a couple of weeks and then retire?

[matt796]

I need to return within the next 2 years unfortunately or it's frozen until my UK state pension age. 

[rammygirl]

Seems odd though my local gov pension was frozen years ago but I can claim it at 60 in three years time. No issue where I am in the world. They sent my recent statement explaining this to Australia. 

I guess public service must be stricter in some way. 

[Phoenix16]

I know I’ve been totally burying my head in the sand here but I left UK with a local government pension (27 years of contributions) that at the time was a final salary based pension final salary being 40K PA.  That was 10 years ago, never thought about retirement, never notified them of my change of address,  nevertheless thought about transferring it here?. Is it’s still worth claiming? S it worth anything?? Maybe I should let them know where I live first of all!!