Pension optionswhen moving overseas

dilby

Hi all - long story short, thoughts appreciated.

I'm Australian but also have UK citizenship and have been in the UK running my own business for a few years. My wife and I (29 and 30 yrs old respectively) have wanted to set up a pension but we were planning to move back to Australia. However over the past year or so due to personal circumstances we're having to delay this for an unkown period of time, but roughly 4 years.

We met with a pension adviser regarding our options, who said because we plan to move back in the nearish future finding a pension that could be easily transferred would be tricky and instead recommend we save using stocks and shares ISAs while in the UK.

Do you think thus us good advice? Thanks everyone

xylophone

Start a pension?

http://www.aviva-for-advisers.co.uk/adviser/site/public/tech-centre/tech-article-detail/overseas-opportunities-for-personal-pension-members

http://www.scottishwidows.co.uk/Extranet/Literature/Doc/FP0322

atush

dilby wrote: »

Hi all - long story short, thoughts appreciated.

I'm Australian but also have UK citizenship and have been in the UK running my own business for a few years. My wife and I (29 and 30 yrs old respectively) have wanted to set up a pension but we were planning to move back to Australia. However over the past year or so due to personal circumstances we're having to delay this for an unkown period of time, but roughly 4 years.

We met with a pension adviser regarding our options, who said because we plan to move back in the nearish future finding a pension that could be easily transferred would be tricky and instead recommend we save using stocks and shares ISAs while in the UK.

Do you think thus us good advice? Thanks everyone

No, I dont. I'd open a UK pension gaining tax relief while I could. Worry about what happens to it in 30 years time alter. How do you know you wont move back?

princeofpounds

Through the magic of Google:

https://www.gov.uk/transferring-your-pension/transferring-to-an-overseas-pension-scheme

If Australia has a ROPS option then I should imagine it's all fairly straightforward.

Good luck.

HardCoreProgrammer

atush wrote: »

No, I dont. I'd open a UK pension gaining tax relief while I could. Worry about what happens to it in 30 years time later. How do you know you wont move back?

Not so fast. Income tax seems to be higher in Australia at the moment:

https://www.ato.gov.au/Individuals/Income-and-deductions/How-much-income-tax-you-pay/Individual-income-tax-rates/

Income above AUD 37,000 (just under GBP 20,000 at today's exchange rate) is taxed at 32.5%.
We do not even know if OP is paying 20% or 40% tax in the UK. If OP is paying 20% tax (note: cannot get National Insurance refunded into the pension), they are probably going to make a loss of 12.5% when if they are drawing the pension now.

OP If your independent financial adviser specialises in overseas pension transfers and cannot think of a way, I would go with their advice rather than rely on anonymous people on this message board. On the other hand, if your IFA is not a specialist in this area, I would go and find one who is.

HardCoreProgrammer

And 1 more point I forgot to mention. ISAs are tax free when you are resident in the UK. If you move back to Australia and leave your money in the ISAs, it is possible that tax will be payable to the Australian Taxation Office (even if they are deemed tax-free in the UK).