Transferring UK Pensions to Australia - UK Pensions Age 55+
Expert Advice and Services Transferring UK Pensions to Australia
We have been working with UK Expats in Australia and Australians (with UK Pensions) for over 17 years, assisting them in assessing where their retirement monies might be best placed for their retirement.
However, since April 2015 due to UK Legislation and the introduction of the 'Pensions Age Test' it is no longer possible for a person under the age of 55 years to transfer a UK Pension directly to an Australian Super Fund (however please see information regarding options for under 55’s).
Also, from this date (again due to UK Legislation) Pensions that are UK Government Un-Funded Defined Benefit Schemes (such as NHS and Police Pensions) were/are unable to be transferred to an Australia Superannuation Scheme regardless of age (or indeed any Pension/Super Scheme that is not a Defined Benefit Scheme).
Age 55 and Over
For persons aged 55 years and over it is possible to transfer a UK Pension to Australia (subject to it not being a UK Government Un-Funded Defined Benefit Scheme as detailed above).
Therefore, if you are 55 years or over and have a UK Pension then we can work with you in assessing your retirement needs and transferring (if appropriate) your UK Pension to Australia to a Qualifying Recognised Overseas Pension Scheme (QROPS).
The area of UK Pension Transfers to Australia has become more and more complex over the years due to a number of legislative changes both from the UK and Australia.
Some of the most prevalent changes under Australian Rules included the lowering of Australian Contributions Caps and the lack of Australian QROPS (Public Offer) Superannuation Funds.
Currently there is only one public offer Australian Superannuation QROPS Scheme available capable of receiving a UK Pension Transfer .
Other options include establishing a Self-Managed Super Fund (SMSF) and applying to HMRC for the Self-Managed Super Fund to be QROPS registered (or alternatively converting an existing Self-Managed Super Fund to a QROPS) however this does involve engineering the Trust Deed of the Fund to only allow UK Pension Transfers to be received for members aged 55 years and over.
Self-Managed Super Funds are definitely not for everyone, and part of our service will be to work with you to ensure that the most appropriate Superannuation vehicle is used.
Given the reduction in Contribution Caps a lot of cases now have to undergo a phased Contribution Strategy that will need to be planned for so that breaches of the Australian Contribution Caps do not occur.
This may include the opening of separate UK Pensions (SIPP) and internal UK Transfers, but this is something that will be assessed and indeed as part of our service we will undertake the whole process for you.
Where required Vista will engage UK FCA Regulated Advisers authorised and qualified to deal with safeguarded Pension Benefits on your behalf.
FAQ
Can I Transfer My UK Pension to Australia?
Yes – if you’re aged 55 or over, and your pension is a defined contribution (or sometimes a private defined benefit), you can usually transfer it to an Australian super fund. However, it must be a QROPS – a Qualifying Recognised Overseas Pension Scheme – otherwise you could face heavy UK tax penalties.
Can I Transfer My UK State Pension?
No – your UK State Pension can't be transferred as a lump sum. But if you've paid enough National Insurance in the UK, you can still receive it from age 66 (rising to 67), even if you're living in Australia. It’s paid every four weeks into an overseas bank account.
What Is a QROPS?
QROPS stands for Qualifying Recognised Overseas Pension Scheme. It’s a type of super fund recognised by HMRC (the UK tax office) to receive UK pension transfers. Not all super funds in Australia qualify – in fact, only a few do. We use one of the only APRA-regulated QROPS options available alternatively it is possible to arrange for a Self-Managed Super Fund (SMSF) to become a QROPS.
Why Do I Have to Be 55 or Older?
This is a UK requirement, not Australian. For a super fund to stay on the HMRC-approved QROPS list, it must restrict access to people 55 and over (soon moving to age 57).
Will I Pay Tax in Australia When I Transfer?
That depends on how long you’ve lived here. If you transfer your pension within six months of becoming an Australian tax resident, there’s usually no tax. After six months, any growth on your UK pension since you moved here may be taxed – either at your personal rate, or typically 15%.
What’s This Five-Year Rule I Keep Hearing About?
This is a UK rule that applies after you transfer your pension. For five years, you can’t do anything with the money in your QROPS that you wouldn’t have been allowed to do in the UK. Withdrawals must still follow UK pension law during this time.
Can I Use the Money Once It’s in Australia?
Yes – once you meet a standard superannuation condition of release (e.g. retirement from age 60), you can access your funds via an account-based pension, just like any other super. And if you’re over 60, the pension income is generally tax-free in Australia.
Are There Any Risks?
Yes – transferring a pension is complex and mistakes can be costly. Using the wrong transfer strategy, triggering unauthorised payments, or not planning around contribution caps can lead to ATO and or UK tax/penalties. That’s why it’s critical to use an adviser who understands both UK and Australian rules (that’s us!).
What About Fees and Dodgy Advisers?
This space has had its fair share of rogue operators. Some offshore advisers used to charge huge hidden commissions by funnelling pensions into offshore bonds. We don’t do that. Our advice is transparent, fully regulated in Australia, and designed around your best interests – not hidden fees.
What About Contribution Caps?
The transfer usually in part counts as a non-concessional contribution to your super. There are limits based on your total super balance and age – we check this carefully and will ensure we consider what strategy might be the best transfer approach.
Will I Still Need to Report Anything to the UK?
The fund (QROPS) handles this. HMRC requires the super fund to report any withdrawals or rollovers for up to 10 years after your transfer.
Why Should I Transfer My UK Pension?
There are several reasons people transfer:
- To consolidate their retirement savings in one place
- To access tax friendly withdrawals under Australian rules
- To hold their pension in Australian dollars
- To simplify estate planning and avoid UK rules
- To manage investments locally
- For easier access once retired in Australia
But it’s not right for everyone – which is why we assess it case by case.
Can You Help Me with This?
Yes, we specialise in helping UK expats transfer their pensions safely and efficiently. We provide clear advice, handle all the paperwork, and work with compliant QROPS providers so you can avoid stress and nasty tax surprises. Please contact us to discuss your UK pension transfer needs.