Daniel is in his early 50’s, he migrated to Australia from the UK 15 years ago and sold his property in the UK along with a couple of personal investments before migrating. His only residual UK assets are two private pension schemes he had while working in the UK. He hasn’t contributed to them since being in Australia and hasn’t really given them a second thought.
Given his age Daniel is starting to think more seriously about retirement funding, he’s been reasonably organised since being in Australia and has a self-managed super fund which both he and his wife Sue are members of. Daniel is concerned that his current financial plans haven’t included his UK pensions and isn’t sure how he can address that. He decides to seek advice and explore his options, needing answers for the following:
- What kind of pensions do I currently have in the UK?
- The UK pension rules seem complex and when I do receive correspondence, I’m unclear around the terminology.
- I have been contacted by a company that says it specialises in UK pension transfers, is that something I should look at?
- The tax repercussions of a UK pension transfer look like they might be high, is this the case?
- I’ve heard about QROPS, what is this and can my SMSF become QROPS approved?
- Can the value of my UK pensions be included in my Australian financial plan for retirement if I choose to leave them in the UK?
Post seeking advice Daniel was able to:
- Understand his UK pension products, their type, costs, benefits, investment activity and projected values.
- Have a clear understanding of his options, what he can cash out, when and with what tax consequences.
- Know if it’s possible to transfer his UK pension and understand the pros and cons associated with the transfer.
- Understand the tax consequences should he decide to transfer one or both pensions.
- Know what QROPS is and how it would apply to his circumstances, he’ll understand the process of application along with the parameters that need to be in place for his application to be successful.
- Daniel will be able to understand how his UK pensions will fit and contribute to his future retirement funding strategy in Australia, should they remain in the UK.
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