Badam Posted January 27 Share Posted January 27 Hi, Been living in Australia and paying into super for 12 years. Previously paid into UK pension/NI contributions for 10. We’re debating where we want to retire and if it’s the UK we’d move back in the next few years. Just wondering if there’s a cut off point after which it becomes too late to return to the UK to retire comfortably? I have 20-25 years working life still to go but want to make sure whatever decision we make isnt foolish. Im not overly financially literate with these things so would be grateful for general advice (eg if you don’t move back before you’re 45/50/55 it’s too late etc) thanks Quote Link to comment Share on other sites More sharing options...
Parley Posted January 27 Share Posted January 27 It isn't an age issue. It comes down to how much money you have. If you are a citizen you can move back at any age. 1 Quote Link to comment Share on other sites More sharing options...
Ferrets Posted January 27 Share Posted January 27 It might be worth checking if you can also make NI contributions from Australia; there’s a window to do this going back to 2006 (until April 2025) at a very cheap rate (approximately $350 for each year if you qualify for class 2 contributions). I’d suggest that wherever you are likely to retire that should be something to look into as the UK pension, although taxed in both jurisdictions is not means tested. There are some good threads in this section on that. Good luck! 2 Quote Link to comment Share on other sites More sharing options...
Marisawright Posted January 27 Share Posted January 27 (edited) 13 hours ago, Badam said: Hi, Been living in Australia and paying into super for 12 years. Previously paid into UK pension/NI contributions for 10. We’re debating where we want to retire and if it’s the UK we’d move back in the next few years. Just wondering if there’s a cut off point after which it becomes too late to return to the UK to retire comfortably? Yes, there definitely is, unless you have plenty of money. The problem is pensions. When you retire in Australia, you can take a lump sum from your superannuation or convert it to a pension (income stream). In both cases, the money is completely tax-free. However the British taxman takes a different view. If you move to the UK before you can withdraw your super, HMRC will grab over one-third of your lump sum (if you take one) or tax your pension like ordinary income. So you can see that if you're planning to retire in the UK, you want to pay as little money in superannuation as possible, because otherwise you'll get taxed to billy-o when you claim the money. Obviously you don't get a choice about paying into super, so the longer you stay in Australia, the worse it gets. It gets worse. If you retire in the UK, you won't get your Australian government pension at all, ever, because you won't meet the residency requirement. And if you haven't been paying NI contributions, you won't get the full British government pension either. Bottom line, if you're sure you want to spend your old age in the UK, then the sooner you can move the better, so you can start building up your British pensions. Edited January 27 by Marisawright 3 Quote Link to comment Share on other sites More sharing options...
InnerVoice Posted January 28 Share Posted January 28 3 hours ago, Marisawright said: If you retire in the UK, you won't get your Australian government pension at all, ever, because you won't meet the residency requirement. The OP has stated that they've been here for 12 years, so one assumes that they would meet the residency requirement which is at least 10 years here in total, with one period of 5 years without a break in residency. However, they wouldn't be able to claim the Aged Pension if they weren't physically in Australia. Quote Link to comment Share on other sites More sharing options...
Marisawright Posted January 28 Share Posted January 28 (edited) 30 minutes ago, InnerVoice said: The OP has stated that they've been here for 12 years, so one assumes that they would meet the residency requirement which is at least 10 years here in total. 10 years is enough to be eligible for the pension, but, if you move overseas, you don't get the full pension unless you spent 35 years in Australia. Anyway, that's not the residency requirement I'm talking about. There's another one. In order to claim the Australian pension, you must be legally resident in Australia for 2 years around the time you claim. For example, if you have been resident in Australia fora full 2 years before you claim, you can leave Australia the next day and keep your pension. OR you can arrive in Australia, establish a residential address, then claim. You'll get the pension immediately, but you must then stay in Australia for a full 2 years, they'll take it away again. However in both cases, when they leave again, the amount of pension would be reduced to the overseas rate regardless. So if the OP moves now, the only way they can get the Australian pension is to move back to Australia for a couple of years in their 60's or 70's, which most people wouldn't find practical. Edited January 28 by Marisawright 2 1 Quote Link to comment Share on other sites More sharing options...
InnerVoice Posted January 28 Share Posted January 28 1 hour ago, Marisawright said: 10 years is enough to be eligible for the pension, but, if you move overseas, you don't get the full pension unless you spent 35 years in Australia. Anyway, that's not the residency requirement I'm talking about. There's another one. In order to claim the Australian pension, you must be legally resident in Australia for 2 years around the time you claim. For example, if you have been resident in Australia fora full 2 years before you claim, you can leave Australia the next day and keep your pension. OR you can arrive in Australia, establish a residential address, then claim. You'll get the pension immediately, but you must then stay in Australia for a full 2 years, they'll take it away again. However in both cases, when they leave again, the amount of pension would be reduced to the overseas rate regardless. So if the OP moves now, the only way they can get the Australian pension is to move back to Australia for a couple of years in their 60's or 70's, which most people wouldn't find practical. That's interesting. I was aware that if you moved overseas permanently then any pension you received was pro-rata, based on how many years you'd been resident in Australia out of 35, but I was unaware of the two-year requirement. If you returned to Australia and claimed the Age Pension, could you still leave the country for overseas holidays during that time without it affecting your payments? I recall reading somewhere that as long as you didn't leave the country for more than 6 weeks, your payments would be unaffected. Quote Link to comment Share on other sites More sharing options...
Marisawright Posted January 28 Share Posted January 28 3 hours ago, InnerVoice said: If you returned to Australia and claimed the Age Pension, could you still leave the country for overseas holidays during that time without it affecting your payments? I have no idea, I didn't get that far. 1 Quote Link to comment Share on other sites More sharing options...
Nemesis Posted January 28 Share Posted January 28 Just to say that if you can stick it out in Oz until you can access your Super, withdraw the lot and turn it into savings, then move it to the UK before you move back. Doesn't need to be long before you move - mine only got here 2 weeks before I did, but wasn't taxed because it was moved from a Savings account not a Super one. I'd advise proper financial advice - I'm merely retelling what I did Quote Link to comment Share on other sites More sharing options...
Marisawright Posted January 28 Share Posted January 28 25 minutes ago, Nemesis said: Just to say that if you can stick it out in Oz until you can access your Super, withdraw the lot and turn it into savings, then move it to the UK before you move back. You are absolutely right, but that does mean they'll need to stay in Australia until they're 60 at least (and it's very likely the government will increase that age as time goes on, so who knows how long they'll have to stay in 20 years' time?). Quote Link to comment Share on other sites More sharing options...
Nemesis Posted January 30 Share Posted January 30 On 28/01/2024 at 11:33, Marisawright said: You are absolutely right, but that does mean they'll need to stay in Australia until they're 60 at least (and it's very likely the government will increase that age as time goes on, so who knows how long they'll have to stay in 20 years' time?). Oh yes, its a long process and a moveable feast! Could be an option for some to consider though. Quote Link to comment Share on other sites More sharing options...
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