British pension transfer deadline

Time is running out if you wish to transfer a UK public service pension benefit.

British pension transfer deadline

The time to act is now if you have worked in the British public sector and wish to take advantage of favourable superannuation tax rules.

After 6 April 2015, former National Health Service workers, teachers, police, fire fighters and anyone else employed in the British public sector will no longer be able to transfer the benefit into an Australian super fund. 

This could be costly when it comes time to retire. Currently, any money drawn from an Australian super fund is tax free after the age of 60. Whereas, if the money comes direct from the UK pension fund, it will be paid directly into a bank account and therefore liable for assessment for Australian income tax. It is also subject to the exchange rate at the time. 

Given that the deadline to lodge a transfer request falls over the Easter period, the actual deadline is 2 April 2015. Prior to lodging a request, a quote must be received from the fund, which can take some time. 

Any benefit not transferred will be paid as a partial lump sum, with the remainder paid as a regular pension over the beneficiary’s lifetime. Also, should a member die, the spouse will receive only a half pension until they die. Australian super pays the full amount plus insurance in the event of a member’s death. 

If you are unsure of how this may affect you, consult an independent financial advisor.





    COMMENTS

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    MICK
    27th Feb 2015
    11:05am
    I don't understand what the exchange rate has to do with this as superannuation is not like an investment where the investment was purchased with local dollars and then converted into GBP. So on selling there is either an exchange capital gains or loss.
    Personally I find it abhorrent that retires can claim 2 pensions. Either you get one from your new country (the norm) or the old country.
    Precious 1
    27th Feb 2015
    10:09pm
    We don't get two pensions at all a part pension which can be 1 dollar a month to much more and the Australian Pension is geared down to a value that is nothing at all like getting two full pensions...I get on my late hubbys pension as his was the higher of the two ...the amount of stamps he paid into it when we were living in our homeland.....don`t worry we paid for those stamps otherwise we couldn't receive a penny...Please get the facts correct before lodge a disgruntled post on here..........the exchange rate has everything to do with getting small stipend from UK......didn't you know the Reserve Bank recently altered the rates.....all service personnel living in Australia that did many years service in one prolongation get their pensions direct from UK thru the RSL etc......so no pensions at all received from Oz......we left our own country in our 20s so therefore couldn't claim any retirement pension then ...only at the retirement age of 62 W and 65 Mand then came here and worked till retired and that is the only period of our working life that we get a pension or part pension.......
    *Imagine*
    27th Feb 2015
    11:53am
    Oh dear! Here we go again. Misinformation and misunderstanding and the sharing of ignorance.

    Let us start by differentiating between a Defined Benefit Pension (where you have a percentage of your salary paid for life and when you die a lower percentage is paid to your spouse, when they die the pension and all funds associated with it are defunct - gone.) and a Defined Contribution Pension (where you are presented with a lump sum that can be converted into an allocated pension and will last until the total runs out, and can be included in your estate if there is any left).

    Public servants in AUS depending on age, may be under either scheme. Debbie says ‘Australian super pays the full amount plus insurance in the event of a member’s death.’ NOT IF IS IS A DEFINED BENEFIT SCHEME like the one she is describing from the UK. The spouse get 60% on the pensioner’s death and when the spouse dies the Govt keeps the rest. Oh! and it also gets taxed on receipt just like a wage because the Govt ran it as an unfunded scheme (A giant Ponsi scheme, that would result in a prison term if run by private enterprise.)

    Mick I have answered your point a few weeks ago on another post. A person who has worked in the UK for eleven plus years is entitled to a UK pension because they paid into the State administered Defined Benefit Scheme. However, if the recipient is also eligible for an AUS age pension, then Centrelink demand that they first claim the UK pension and then will reduce the AUS pension accordingly. In other words a UK pensioner by definition will only ever be a part AUS pensioner.
    MICK
    27th Feb 2015
    2:46pm
    Thanks for the explanation. This is a weak area for me because I do not get a pension and have subsequently not put enough time in to have the detailed knowledge you have. Always good to be corrected and I'll try to file it for future use.
    The fact that a UK pension works like income here when applying for an Australian pension is news as I had been led to believe otherwise.
    Thanks.
    Dotty
    27th Feb 2015
    12:51pm
    I was a public servant for about 12 years in the UK and I receive an index linked occupational pension paid into my Australian bank account. At the same time I receive UK state retirement pension which is paid into my UK bank account. It was of course frozen at aged 60. Do I need to do anything in the light of your article today. Please could you advise me Thank you Dotty
    Precious 1
    27th Feb 2015
    10:18pm
    I think this govt here will sort it out for you amicably and get your rightful amounts...I don't think you will get much from here as most will come from UK........see a lawyer or financial advisor.......also Tax specialist......My small amount is different everymonth as it all depends on the Exchange money rate.......They told me and keep telling me from UK that they send my money into Australia one month before I get it...you imagine all the money coming into the Reserve Bank here that is getting interest...those that are quaking about our small amounts coming to us Poms should understand this and educate yourselves then you wouldn't feel so grudging........the interest on all of this money which comes from many many countries in the world to immigrants here goes to the Australian economy probably helping to pay all those lazy scoundrel that abide here who don`t want to work only roll around the oceans and then scream when a Shark gets near.......
    Bizylizy
    27th Feb 2015
    9:42pm
    Please note that B.P.I.A (British Pensions In Australia) will assist you with your UK Pension problems. Ask for Jim Tilley