Retirement planning for UK expats in Australia

Types of Pension Plans


Most expats would love to take an early retirement in Australia, but few have the financial plans in place to let them live the dream. The result is expats who could afford to retire carry on working, while others give up work too soon and exhaust savings which should last them in to their later years.

That’s why expats need a retirement plan that gives them some realistic financial goals to work towards. If you are in Australia, you need to consider whether that’s where you are going to stay, whether you will return to the UK or even move to another country. Once you have an idea where you will retire, you can look at issues such as the cost of living, taxes and estate planning.

Gauging your spending power

The cost of living in your retirement destination makes a big difference to your spending power. Housing expenses in Sydney and Melbourne are much the same as London, but the day-to-day cost of living is often lower even though imported goods are dearer.

Look at your savings and expected pension income and see if you can survive at the standard of living you find comfortable on that amount of money. Don’t forget as an Australian resident, your UK state pension is frozen at the level of the first payment.

The other figure to factor in is tax on pension and investment income in the UK and Australia.

How much cash do you need?

How much cash you need for retirement depends on your personal circumstances. Some expats can survive on much less cash than others. Do factor in inflation and a contingency fund for unexpected expenses such as home maintenance or a new car.

Inheritance is another important point to considers. Australian law is like that in the UK, but rules about who inherits and how much do have some subtle differences, so take professional advice in Australia about writing a will.

Expats should also have a will in Britain if they retain any investments, pensions or property back home. This retirement planning goes to waste if expats fail to make sure they have the right visas for a long-term stay in Australia. Part of the visa process is proving you have enough cash to finance your stay in Australia without claiming social security.