Contributing to UK pension and Super

[Red Rose 331]

Hi all, 

I'm sure this has been asked many times before and I am being lazy not using the search button

Do those who have moved back to the UK still make contributions to their Super fund from their UK accounts (I would propose to make one or two contributions a year to top it up) as well as contributing to a UK pension? 

thank you!

 

 

 

[Marisawright 10,066]

Do you have a self-managed super fund? If you do, then you'll need to get some professional advice as you can't be an executor of a SMSF if you're overseas. You may have to wind it up.  

If your super is in an ordinary super fund then yes, you may be able to pay into the fund once you're resident overseas.  You'll need to check because it varies from company to company.  However if your existing fund won't allow it, it's pretty easy to transfer to another fund, provided you do it while you're in Australia.  

Whether you SHOULD continue to contribute is another matter.  If you're not planning to return, then I can't see how it would make any sense because you lose the main benefit of superannuation -- the fact that on retirement, you can withdraw your lump sum, or convert your super to a pension, and it's all tax-free.  Whereas if  you're tax resident in the UK, the British taxman will grab a huge chunk of the lump sum, and even if you convert it to a pension, it's taxable as normal income.

If you're old enough to cash in your super before you go, that would be the best option.  You need to make sure it will land in your bank account before you leave.  Once it's there, it's just savings and won't be taxed by either country (unless you earn interest on it, of course).

[s713 1,948]

I don't send money over. We moved our various UK pensions over to Australia when we thought we'd be staying there forever and consolidated them into two super accounts. So now, we have some fairly sizeable money over there, but we've moved back to the UK and, obvs, you can't transfer it back.

I don't really know what we should do for the best once that money reaches our 'preservation age' i.e. 60. If we lump sum it and transfer it back, the tax man will take a third. If we pay ourselves a wage each year to avoid tax, it becomes messy and might not be enough to live on each year. Bit of a quandary. But what I'm certainly not going to do is exacerbate the problem and send more money over. Plus, I work in local Govt. here now and have a good pension from that.