UK Pensions in Australia
UK Government PensionThe UK Government age pension can be paid to you in Australia, on reaching Retirement age. The amount of the pension payment will be frozen at the rate in force at the date of entitlement, or the date the person left the UK if they were already a pensioner at that time. However, if you return to live in the UK, you’ll receive a State Pension with all of the indexation increases.
British Pensions in Australia Inc. [BPiA] is a "not for profit" association of volunteer expatriate British State pensioners, challenging the UK government's discriminatory, immoral pension legislation, which causes our UK pensions and those in Canada, South Africa and NZ to remain "frozen"; but in the USA, EU, Israel and some 20+ other countries, the UK State pension is regularly increased for inflation. Contact: Click here for link
If you are eligible for the Australian age pension, it may be reduced when your UK pension is taken into account, depending on the above mentioned Income Test.
Nov 4th, 2008: A case heard before the European Courts has determined that the UK government is free to freeze the pension rates, in the way that it currently does, for retirees that live in certain countries (Australia included). The case judgement is here: Carson and Others v. the United Kingdom (application no. 42184/05)
UK National Insurance Contributions whilst Overseas These are dealt with by the HM Revenue & Customs If you live abroad or are intending to go abroad, you may in certain circumstances, pay Class 2 contributions voluntarily instead of Class 3 contributions. See leaflet NI 38 Social Security abroad for more information.
The weekly Class 2 contribution rate for 2004-2005 was £2.05, whereas the weekly Class 3 contribution rate was £7.15.
From 6 April 2000 paying Class 2 NI contributions are less expensive than Class 3, and they can help you satisfy the contribution conditions to qualify for Incapacity Benefit or Maternity Allowance when you return to the UK. They will also help protect your entitlement to State Pension and bereavement benefits which can be paid anywhere abroad.
Private PensionsThis can be a tricky area, and professional help is often needed. Most UK company and personal pension funds can be transferred to Australia, but the way in which transfers from UK pension schemes are taxed has changed, and the new legislation, introduced by both the UK and Australia, could allow a transfer to attract substantial benefits. Two possibly useful lnks on this are:
Companies that specialise in transferring Private UK pension fundsThe above info is a provided as an information source only, I have no knowledge of how the companies perform.
Transferring UK Super after April 6th 2006: Changes to UK Pension Transfers On 6 April 2006, as part of major pension reforms in the UK, a relevant UK regulations becomes effective. From 6th April 2006, any money transferred from a UK registered pension scheme to an Australian Super fund will be subject to a tax of 40%, payable to the UK authority unless the Australian fund is a "qualifying recognised overseas pension scheme" (QROPS). For an Australian superannuation fund to become a QROPS imposes a significant administration burden on the Australian Super Fund, requiring it to report to the UK regulators when rollovers, pensions or ETP's are made from its fund. The costs involved in complying with these requirements are not insignificant, and there are also ongoing compliance and regulatory risks involved when complying with overseas jurisdictions. Australian Super funds that have become qualifying schemes are listed at the PDF file shown at this webpage:
A PDF file on the subject is available at: ukpensionchanges
LinksUseful Reading
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