SIPP Pensions for UK Expats in Australia

Types of Pension Plansexpats


Figuring out your finances as an expat is one of the most complicated parts of making a move to Australia. Not only do you have to worry about finding a home and a job, but you have a pile of more mundane tasks to sort out, such as healthcare and schools for the kids.

On top of that, you need advice about savings, pensions and investments because the financial and tax rules are considerably different between Britain and Australia.

Pensions are a big worry. Transferring a pension from Britain to Australia is possible via several routes, but making the switch is no good if you decide you may want to return to Britain at some time in the future.

SIPPs are ideal for many expats

Part of this decision is working out if you are a permanent or temporary expat. This matters because this is the fundamental that decides where and how your income is taxed.

If you stay a UK taxpayer who is away for home for a year or two, then all the tax benefits of contributing to a pension back in Britain apply, such as HM Revenue and Customs (HMRC) topping up your contributions.

Most advisers would suggest a self-invested personal pension (SIPP) is the ideal retirement saving vehicle. SIPPS offer more flexible investments than standard personal pensions, but still come with all the benefits of flexible access once you reach the age of 55.

Advice warnings

If you are over 55 but living in Australia, you can still take the 25% tax-free cash lump sum and any more cash – and more cash if you wish although you will be subject to UK and Australian tax.

As Britain and Australia has a double taxation treaty, you won’t pay tax on the same money twice as the tax authorities in the UK and Down Under will adjust their demands to take account of any tax you have paid in the other country.

If your pot is worth £30,000 or more, you need to be aware of rules about pensions. In the UK, you must take professional financial advice if withdrawing money by flexible access or moving your pension.

In Australia, if you are considering switching money to a superannuation fund, you must take advice from a regulated adviser based in the country.