UK Pension in Australia Tips
If you’re ever tried to transfer your pension you may have some issues and hurdles in your way if you are moving from the UK to Australia. In this guide we’re going to give you some excellent tips on moving your UK pension. This is for people who are either from the UK trying to go to Australia or those who are from Australia originally and are trying to move back to the UK who want to convert their UK pension over to Australia.
Does Age Matter?
As a matter of fact, it does. People don’t realize sometimes that you have to be a certain age in order to transfer your pension. You can transfer your UK over to Australia if you’re 55 or older, and there are numerous rules that you need to follow that are in place to protect that (click here for the full details). If you’re under 55, you may end up losing everything you have saved if you try this, and you don’t want to do that. The best bet is that you might have some loopholes that you can jump through in order to get your pensioned transferred if you’re just below 55, although most people wouldn’t recommend it.
Different Funds Available
One of the most common is a QROPS or a ROPS fund. This is primarily for people who don’t want to face a HMRC penalty on taxes so they use a QROPS fund. The manager of your scheme will actually report for 10 years with the HMRC in order to ensure that you meet all of the requirements necessary. Unfortunately, you don’t get much slack though, and you can ensure that your money will be available in about 10 years after you transfer to this option. It also does allow numerous categories in which you can place your pension into and the most popular is actually a hybrid which combines both defined contribution (a money purchase) and defined benefits.
The Main Question is If Australia Will Allow It or Not
Most people think that they can simply transfer their pension and it is the exact same and all of the funds are treated equally by Australia, when the truth of the matter is that Australia will not treat this as a reserved or older contribution. It will actually start all over in Australia as a completely new contribution. So, it’s like taking your money out of your pension and then putting it into a new one in Australia.
There is no actual way to simply transfer a pension directly to an older pension in Australia. You can’t be 65 and there are financial limitations to how much you can actually pay in on your pension every year. One thing they do have as a loophole to consider though is that if you pay three hundred thousand (their normal limit is only $100k that you can put in each year into your Australian funds) at one time, you can’t pay in for two years after that, as you’ve already paid it in advance. This isn’t a bad option for those who have the funds available that want to pay in and let it sit for a little while though.
When you’re considering jumping through the hoops to come back to Australia, these are extremely important things to consider and you can actually find some excellent tips on getting this done. One of your best bets is to get proper wealth management counsel and one of the ways you can do this is with Harding Wealth Management, who have been in service for years to help give financial advice to numerous customers. It’s a very important decision when it comes to moving your pension, so you should get the best financial consultation possible.
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