Retiring Down Under: Have you Thought About your Pension?
It is not hard to see why Australia is becoming a popular retirement destination, with its warm climate and relaxed lifestyle. If like a growing number of Brits you are thinking of relocating to Australia, you will likely have many questions about how your pension could be affected, what you should do with your pension and whether a QROPS in Australia could be beneficial for you.
It is only understandable that you will want to make sure you are getting the most from the pension pots you have worked hard to build up in the UK. It is advisable to consider your options and seek financial advice from a specialist financial adviser such as Prism Xpat. Our team of expat financial advisers provide bespoke UK-Australia pension advice to ensure you are making informed decisions about your future.
Our advisors have extensive knowledge and experience with transferring UK pensions to a QROPS in Australia.
What are your pension options when moving to Australia?
If you are retiring to Australia there are three main options when it comes to private and workplace pension pots you have built up in the UK:
- You can leave your pensions in the UK and draw them in Australia;
- You can transfer your UK pensions to QROPS in Australia;
- You can undertake a mix of the above options.
While leaving your pension in the UK may seem like the easiest option, it may not be the most beneficial from a tax point of view. If you leave your pension in the UK after moving to Australia it is still paid in Sterling, meaning you may also incur currency conversion costs and could see a decrease in benefit due to unfavourable exchange rates.
If you were to transfer your UK pension to a QROPS in Australia, not only would you avoid currency conversion costs and remove losses from unfavourable exchange rates, you may also benefit from:
- Reduced tax liability
- Increased flexibility of pension income
- Greater tax efficiency
Before making any changes to your pensions, it is advisable to seek pension advice to ensure you have the most effective pension planning strategy in place. At Prism Xpat our expat advisers provide advice on all aspects of pension planning when moving abroad, including QROPS in Australia. Note that a transfer is not always in your best financial interests and professional advice is recommended.
Can you transfer your state pension to a QROPS in Australia?
While you are not able to transfer your UK state pension to a QROPS in Australia, you would still be eligible to claim your state pension if living in Australia. To qualify for a UK State pension in Australia you must have paid at least 10 years of National Insurance Contributions and you will need to have contributed for 30 years to receive a full pension.
At Prism Xpat, as an international financial advisory and expat pension advice specialist, our experienced team of advisers can support and guide you through all the options available to you for your pensions when you are moving to Australia, including transferring your UK pension to a QROPS.