British Private Pension, What to Do?

Donaldhump on 05/09/2015 - 11:19
Last edited 05/09/2015 - 11:45 by 1 other user

Background: I have 9k (not that much) in a British Private Pension.
I was looking to transfer now that the exchange rate is good.
However, the British government has removed all but 2 Aussie funds off their approved list of funds I can transfer to.
They must comply with strict age limits and not be able to be accessed, even if there is financial hardship.

Anyway, to cut a long story short, I'm 38 what should I do ?

I was thinking of just having a holiday at 55 (access age) to England , accessing it and spending it there.

Any other suggestions?

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  akyeeeahdude on 05/09/2015 - 14:35

  Why not open an account with LGSS super (approved QROPS) and then have it transferred to that account?
  https://www.lgsuper.com.au/documents/forms.asp?scheme=public…

  Then when you reach your preservation age, you look look at accessing the funds…

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    Donaldhump on 05/09/2015 - 14:44

    was thinking of that;. ideally don't want to pay double the fees by having two funds.

    is it possible to transfer to LGSS and then roll over to my current super fund

    thanks

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  theclearout on 05/09/2015 - 17:30

  Hi, not sure what you mean when you say the British government has removed all but 2 Aussie funds. Last time I checked there were hundreds of funds that were QROPS. You can even have a personal Aussie fund that is QROPS (just need to prove you meet the requirements).
  I transferred 2 funds from the UK just over a year ago, just over AUD$200k in total - bummer I didn't wait until now !!
  Anyway, only issue I had is one of the UK funds kept back about the equivalent of AUD$5k at the time. I was a bit annoyed as it was from the smallest UK fund that I had so percentage wise it seemed like a lot.
  In the end it was a fairly painless process, although it does take time. My Super fund here processed everything although it really does help to gather all the info you have and provide it in one go. There was no charge from my Aussie fund. They process it just like any other roll-over.

  We are currently in the process of trying to move my wife's UK fund and not proving to be as smooth.
  There seems to be some restrictions imposed by UK that kicked in around Easter this year, but seem to be related more to defined benefit schemes from the UK moving to defined contribution schemes here….not sure why anybody would want to change from a defined benefit scheme anyway….

  $9k is certainly worth chasing and without knowing your circumstances (age, etc.) I reckon you would be better off moving it here, especially now.
  My father in law (RIP) had an old UK pension (he left there when he was quite young) and when he received his monthly cheque he would laughingly refer to it as his beer money as it would just about cover a slab at the time.
  I suspect if you left your $9k there it would do the same for you, but rolled into a fund here probably much more.

  Good luck…wouldn't mind hearing how you get on, especially more about restrictions on 2 funds here, especially for my wife.
  We have a while to go….both late 40's

  • 

    Baysew on 05/09/2015 - 18:56

    He means what he has said -
    HMRC has delisted thousands of overseas schemes](http://www.telegraph.co.uk/finance/personalfinance/expat-mon…)

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  Donaldhump on 05/09/2015 - 21:37

  thanks for the info, looks like ill have to open LGSS, and transfer to there… Be interesting to see if i can then transfer to my current super later on, effectively bypassing the QROPS crap.

  thanjs

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  cashless on 10/09/2015 - 18:17

  What makes you think it'll grow better in Aus rather than UK?
  All depends on who it's invested with & how, but certainly worth considering leaving it exactly where it is.
  I did the same (by mistake) a few years back. I moved what I thought was all my UK pensions over into QROPS acct here in 2008.
  Turned out I missed a hidden one worth a few £k, but not much.
  After thinking about it for a while I thought maybe it'd be a good idea to leave it there. Reasons?
  Spreading investments,
  Having access to UK £ may well be useful when I retire, especially if I visit there
  Avoids the need to exchange currencies if you have a stash of both A$ & UK £
  Kind of a hidden nest egg as well
  Also, now that UK laws have been relaxed a bit, it's much easier to access lump sum

  • 

    Donaldhump on 12/09/2015 - 11:09

    what you say is good, having two diff currencies at hand. use the british when strong and leave it when weak.

    however you pay 40% tax on 75% of your British pension when you withdraw it ie 30% tax overall AFAIK. (god knows why Britain makes formulas hard, it is just 30%)
    however in australia it is tax free on withdrawal and only 15% tax on the way on the growth component of it since you came to australia, so believe ultimatly you are better off transferring one day.

    i think what i have said is correct, if not let me know.

    i was basically waiting till the qrops crap is sorted out, and then transferring. as dont want 2 superfunds over here, just more fees

    what do you think

    • 

      cashless on 14/09/2015 - 11:40

      Not sure where you got 40% tax on 75% of British Pension?
      If you live in Australia - I assume you do - then you will pay tax to the ATO according to Australian rules.
      If you are earning income from a British Pension then you will declare that to the ATO as foreign income and it will be treated as part of your total income for tax purposes.

      It's also incorrect what you say about Australian Super.
      Yes, there is a 15% tax deduction for all concessional (before-tax) contributions that you make.
      You will also find that the Australian government will tax the earnings on your Super investments (at max 15%).
      The earnings from your Super once you retire (and are aged at least 60) are currently untaxed - that much is true.
      However, depending on your age, don't rely on that staying the same forever. Labour have already stated that they will be reviewing that (tax free income) if they come to power and the present Liberal govt are so desperate for cash, I wouldn't put it past them to start looking at taxing superannuation income.

      If you need some (self) guidance on how Super works in Australia, then a great place to start is
      www.superguide.com.au
      Loads of useful info about how it all works written in a way that most people can understand.