Retirement plan and options

Manc2025

Hi there. New to this forum so apologies if I don’t get the format right. I’m looking for some advice. My wife and I are both 56 and looking to retire in 2 years when the kids finish university . We have a couple of DB schemes which I calculate will pay out £60K a year after reductions and tax. We have £200K in cash ISAs and expect to add another £100K in the next 2 years. Two properties paid off and one generates £10K a year once tax, agent fees, etc paid. My wife also has 500K AUD in Australia superannuation funds. Two questions. (1) should we be investing some of our cash differently? Feels like we are being very risk adverse given pensions more than enough to live off. Are bonds a better option? I’ve looked into the superannuation. It can be accessed tax free from 60 in Australia but HMRC will tax it as income. Has anyone had this issue before and identified a way to minimise the tax paid? I did think we could take 25% as a lump sum and pay the rest as regular income. But HMRC will not tell me if they will tax the lump or not - “declare on the self assessment at the time and we will make a judgment. The only other thought is moving to Aus for a couple of years and taking the lot out. My wife is a dual nationality. Obviously expensive and not what we want to do. I would appreciate any thoughts and advice. Thank you in advance.

El_Torro

With £60k coming in a year from DB pensions (after tax) and some rental income on the face of it £300k held in cash does sound like a lot. How much will you be spending on top of this? It's probably a good idea to hold 5 years worth of cash, though the rest can be invested. Either moved to a Stocks & Shares ISA or even in a pension. 

I guess you will both be getting full state pension as well when the time comes, so that's more reliable income that doesn't eat into your cash reserves. On that point, it's worth checking that you are both on track to receive the full state pension.

Regarding your issue with the money in Australia it may be worth getting some professional (paid for) advice on this. 

Manc2025

Thanks for the quick response. Yes, checked and will both get the full state pension at the time. I’ve not done a budget for retirement but can’t see us spending anywhere close to the £60K+£10K from the house.  I was thinking about professional advice but with the number of aussies living here I wondered if it had come up before. 

MallyGirl

Manc2025 said:

Thanks for the quick response. Yes, checked and will both get the full state pension at the time. I’ve not done a budget for retirement but can’t see us spending anywhere close to the £60K+£10K from the house.  I was thinking about professional advice but with the number of aussies living here I wondered if it had come up before. 

Maybe edit your title to mention Australia to attract the right attention?

nerdyhillbilly

HI

We are in similar situation however all our super is in Australia. We had a quote from a tax advice firm of £3000 which feels astronomical for advice!
We reckon our general situation is, if we lift the super at preservation age (60) and take it over either as a lump sum or draw down, it is subject to income tax in UK. Alternative to this is going to live in Australia for over 5 years becoming non resident in the UK for tax purposes then heading back, then we don't think we would be liable for income tax on moneys that come back with us. Not sure on that but cannot afford actual advice at £3000 a pop! It is frustrating that HMRC cannot answer questions regarding tax rules when it is quite literally their job. 
Have you got any further with your queries?