Can I transfer my UK pension to Australia?
Many individuals who are looking to transfer their UK pension to Australia contact us and ask the question, Can I transfer my UK Pension funds to Australia? The answer is yes, but there are certain conditions and criteria which you should consider and in this article, we will cover everything you need to know.
- You must be over the age of 55 – This is because in Australia, under financial hardship rules, you can access your pension funds before the age of 55, in certain circumstances. This goes against UK rules which only allows you to access your pension once you reach age 55.
- If you are between the ages of 67 and 74 – You must meet the criteria of the ‘Work Test’. In summary, you must have been employed for at least 40 hours in a period of not more than 30 consecutive days during the financial year to pass this test.
- MOST IMPORTANTLY – You can only transfer your UK Pension into an Australian scheme that is registered with HMRC as a Qualifying Recognised Overseas Pension (QROPS).
This will most likely leave you asking the following question…
What Australian Schemes are registered with HMRC as a QROPS?
Many Self Managed Super Funds in Australia are registered with Her Majesty’s Revenue and Customs (HMRC) as a QROPS and you may transfer your UK pension to them. The only other alternative is a Retail Superannuation Fund with QROPS status and currently, our Australian Expatriate Superannuation fund is the only Retail Superannuation Fund in this position.
You can find the full list of Super funds in Australia with QROPS status on the HMRC ROPS list.
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So... which route is the best option for you?
Transferring to either a Self Managed Super Fund or a Retail Superannuation Fund requires careful planning and a firm understanding of how they both work.
Self Managed Super Funds (SMSFs) are self-managed, meaning that the day to day management and administration is your responsibility. There are also strict management guidelines and compliance requirements which must be met and failure to do so will result in tough penalties from the regulator.
Retail funds, like our Australian Expatriate Superannuation Fund, are managed and administered by the fund provider. They are very similar in structure to UK Pension schemes. Many people would rather avoid the administrative burden that comes with an SMSF which is why we are seeing an increased number opting for the retail superannuation route.
We are not authorized to provide any financial advice and cannot tell you what is your best option. We would therefore always encourage you to seek professional financial advice before transferring your pension, to ensure the option you choose best suits your retirement objectives and, so that you are made fully aware of contribution limits and potential tax implications.
You can transfer the following types of UK Pensions to an Australian registered QROPS.
- An Occupational Pension Scheme.
- A Defined Benefit Scheme (i.e. A Final Salary Scheme)
- A Defined Contribution Scheme (i.e. A Self Invested Personal Pension (SIPP) or Personal Pension).
- A Small Self Administered Scheme (SSAS)
The following types of UK Pensions are not permitted to transfer:
- UK State Pension
- Unfunded Civil Service Pensions which include NHS, Teachers, Fire Fighters, Police and Armed Forces.
If you would like to find out more about transferring your UK pension to Australia, contact us today and a member of our team would be happy to answer any questions you may have.
This article does not contain personal or financial advice. It is provided for general information only and does not take into account your personal objectives, financial situation or needs. IVCM is not authorized to provide you with any personal or financial advice.
If you require financial any advice then you must make sure that you obtain advice from a suitably qualified financial adviser.