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Tania

Transferring UK pension funds

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Hi

 

I've been advised to transfer any money from my UK pension funds into an Australian superannuation fund - apparently there are many advantages to doing this. I haven't got much but I have two separate company pensions which I no longer contribute into, so figured I haven't got much to lose if I transferred it all into one here...

 

Has anyone done it, do you recommend doing it and if so which company??

 

Cheers

 

Tania

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I've done it with the help of a financial advisor dude. Do explore the tax implications though - in doing my tax return I found that if I hadn't moved my pension over within 6 months of arriving in Perth, the Aus tax man would have clobbered me for quite a few thousand dollars!

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Thanks Phil - yes I saw that little small print I'm still within the 6 months so guess I should make a decision soon.

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Hi Tania

 

You should not transfer your Pension based on the 6 month rule, this really isn't as onerous as it sounds.

 

Your decision to transfer should be made when you are certain (or as certain as can be) that you will remain in Oz.

 

Also if they are Final Salary Schemes then they should not be given up lightly and once a UK Pension is transferred to Australia it cannot be transferred back to the UK.

 

As you say there can be some good advantages to having your retirement monies in Australia but you definitely do not have to rush into anything.

 

Regards

 

Andy

Edited by Andrew Williams

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Thanks Andy, one of my company pensions is a Council one which I do believe is final salary - I'm seeing a Westpac advisor soon so hopefully he'll explain all this not just talk me into transferring...

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Thanks Andy, one of my company pensions is a Council one which I do believe is final salary - I'm seeing a Westpac advisor soon so hopefully he'll explain all this not just talk me into transferring...

 

 

No worries Tania.

 

If it is Council it will no doubt be a final salary scheme, these schemes can have some very strong benefits attached so ensure you are fully aware of all implications of transferring.

 

Hopefully the WestPac Adviser will give you balanced advice, just be sure to understand how they are being remunerated i.e are they going to be paid if they advise not to transfer or are they being paid only if you transfer?

 

I believe that WestPac outsource their Pension Transfer advice to a company called 'Pension Transfers Direct' for the report and this is what the Adviser in the branch will use to determine what advice he gives you.

 

Get him to give his advice as the report from Pension Transfers Direct (PTD) will not provide advice but merely a written report on what your benefits are and how a transfer works, in the report it states that PTD are not providing financial advice.

 

There is lots of talk about tax benefits of transferring Pensions to Australia and this is used as a big driver of transferring and this may or may not be beneficial depending upon the specific individual.

 

For example, monies transferred from the UK to Superannuation/Pension in Australia is tax free in retirement and this obviously can be a a big benefit however the Australian tax free thresholds mean that the first $18,000 of income is currently tax free anyhow, therefore if the UK Pension income is below this value obviously there is no additional tax benefit.

 

As I say be sure to fully understand all implications and remember there is no rush to transfer, it can be done at anytime.

 

 

Regards

 

Andy

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Guest Dan Collins
Hi

 

I've been advised to transfer any money from my UK pension funds into an Australian superannuation fund - apparently there are many advantages to doing this. I haven't got much but I have two separate company pensions which I no longer contribute into, so figured I haven't got much to lose if I transferred it all into one here...

 

Has anyone done it, do you recommend doing it and if so which company??

 

Cheers

 

Tania

 

Hi Tania

 

I echo the 6 months concern with Andy, as whilst it might be a bit more tax, think of what you're giving up in transferring the pension. You can at least have a high degree of confidence in a government defined benefit and the guarantee of income at retirement, indexed with benefits for a partner. You won't find these types of pensions in public or private employers these days in Australia.

 

Also, are you ready to call Australia home for keeps? You might, and I hope this isn't the case, one day return to the UK wishing you hadn't lost your certainty of retirement income. It happens. You can never really say never I know, but given you are probably already into your 6 months, the chances in completing all this are probably tight. You could do this in a rush on the bank's advice, only to find out you miss the boat anyway.

 

Think it over and be careful of an adviser who relies solely on a formatted report from a third party. There is more to it as well as explaining the consequences if you go through with it. In the UK, only advisers who have passed an additional pension exam can advise on transferring such a defined pension.

 

I truly hope your bank adviser has some real idea of what you just might be giving up. Tread carefully...

 

Hope that helps.

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