Emigrating - keep paying pension?

anxious_alan

I'm a complete novice about this kind of thing, so any advice appreciated.

At some point in the next 6-12 months I will be moving back to Australia with my partner and expect to be there for the foreseeable future. I lived there before and when I left I just upped and left as it was only supposed to be for a year, not five...

I'm looking to be sensible about what money I leave behind including my private pension.

I pay into the People's Pension and have another Aviva pension from my previous job, which has approximately 18 months worth of contributions in it.

In the bank I have a (cash?) ISA with approx £16.8k in it. £10k of that was my superannuation earnings from my 5 years in Australia and while we have joint savings I may dip into the ISA for emigration costs.

A couple of questions then, and any advice welcome please. As I type this I realise these are not complicated questions, but sometimes you just need a bit of steerage in the right direction:

- I'm going to transfer my Aviva pension into my current pension as having them consolidated into one feels sensible...right?

- I've always intended to do something with the £10k I mention above. Does it make sense to simply add it (or some of it) to my pension (if I can) so the pot is bigger, or is it better to keep it in a bank and pay monthly from it into my pension? Or is that a weird thing to do as well?
....I guess if it's in the pension then it's stuck there, which may or may not be a bad thing?

- Should I pay NI contributions while I'm away as I do intend to come back to live in the UK eventually?

xylophone

https://www.gov.uk/national-insurance-if-you-go-abroad

https://thepeoplespension.co.uk/help/knowledgebase/can-i-transfer-my-other-pensions-to-the-peoples-pension/

https://thepeoplespension.co.uk/help/knowledgebase/if-i-leave-the-uk-can-i-continue-paying-into-my-pension-pot/

https://thepeoplespension.co.uk/workplace-pension-contributions/#paying-more-into-your-pension-pot

anxious_alan

Thank you - but in terms of the question about adding the lump sum to the pension pot, I appreciate it's probably a simple question with a simple answer and it's just up to me to decide what I prefer, but the PP website doesn't mention adding a lump sum (that I can see).

Is it as simple as "would I prefer to have more in the pension pot by adding a lump sum" or "would I prefer to keep the money in an account and keep contributions going"?

I'm not intending to contribute to the pension from abroad, but pay with savings still in the UK, but thanks for providing the links.

jaybeetoo

https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/moving-abroad

xylophone

but in terms of the question about adding the lump sum to the pension pot,

You also asked

Does it make sense to simply add it (or some of it) to my pension (if I can) so the pot is bigger, or is it better to keep it in a bank and pay monthly from it into my pension?

See also

https://thepeoplespension.co.uk/help/knowledgebase/whats-the-maximum-amount-i-can-pay-into-my-pension-pot/

The maximum contribution could be in the form of regular payments, one-off lump sum or a combination of both. The limit includes the contributions paid into all of your pensions (if you have more than one), includes your personal contributions, tax relief and any contributions that are paid by your employer.

Give them a ring to clarify your personal situation.

atush

- I'm going to transfer my Aviva pension into my current pension as having them consolidated into one feels sensible...right?

I would do it the other way around. Aviva pensions tend to have low charges (if set up thru an employer) and a lot of different investment options.

ffacoffipawb

atush wrote: »

I would do it the other way around. Aviva pensions tend to have low charges (if set up thru an employer) and a lot of different investment options.

I have gone the other way. I have done a partial transfer (90%) from my employer New Generation Pension with Aviva to Hargreaves Lansdown. Yes, I will be paying more, but I now have access to Fundsmith, Lindsell Train, Blue Whale et al which the Aviva pension did not have. Time will tell if this was a good decision, but I am happy with the much larger choice of funds. I found the Aviva choice quite poor really.

Putting it in context, my main SIPP (drawdown account but only PCLS taken) is with A J Bell Youinvest and is worth nearly 4 times the HL account and is wholly invested in IT's.

The HL SIPP will have an LTA charge on most of it as it wont be taken before my 2 DB pensions which I may take early to mitigate the charge. As a result I am investing it more aggressively to try and get the most out of it. Early days and the jury is still out.

Albermarle

I'm going to transfer my Aviva pension into my current pension as having them consolidated into one feels sensible...right?

Whilst you are still working at your current employer then you need at least to keep the current Peoples pension open. If you stop work before you emigrate , then you could transfer them either way around , or even open a new one and transfer them both into that .
You should also look at what funds within the pension you are invested in , not just who the provider is ..

Regarding adding a lump sum or regular payments . It's a kind of gamble . If markets continue to rise, then better to have put in the lump sum . If they fall then the regular payments would be better. You need hindsight !

nigelbb

anxious_alan wrote: »

- Should I pay NI contributions while I'm away as I do intend to come back to live in the UK eventually?

Not sure why nobody else has addressed this but potentially this could be one of the wisest financial decisions you ever make. It all does depend how old you are & how many full years of NI contributions you already have & how many years of NI contributions you would make if & when you return to the UK.

In simple terms you need 35 years NI contributions for a full UK state pension which is currently £168.60/week i.e. £8767 per year. When you are working abroad you can pay voluntary Class 2 NI contributions at £150 for a year versus voluntary Class 3 contributions at £800 for a year if you. If you already have 10 years paid but never return to the UK until retirement buying the 25 years you need will have cost only £3750 in total so the payback time is under six months.

This is all at today's prices & assuming that the rules don't change. There is no rush as you can currently purchase up to six previous missing years but if it were me the cost of Class 2 NI contributions is so trivial I'd be tempted to pay regardless.

Be aware that if you never return so draw your pension there that Australia is one of the few countries where there is no index-linking of the UK state pension once it is in payment.