Migration Finance Expert Advises Caution
Many migrants waiting for news about whether their UK state pensions will be indexed could find themselves worse off by pinning their confidence on a win in the European Court of Human Rights (ECHR) with their challenge against the way the UK state pensions legislation penalises those who retire to Australia.
British state pensions remain payable to those who move to another country after retirement, but it is frozen at the rate it was when they leave Britain unless their destination country has an agreement with the UK. Unfortunately UK and Australia once had an agreement, signed up to by Australia which was subsequently cancelled – for some reason Australia agreed to no indexation of benefits from the UK.
“Should the case be won much of the win for Australian pensioners will be devoured either by taxation or by 40% of each £ won being deducted from their Australian Age pension - and its likely to be retrospective.” says Geraint Davies, Managing Director of migration finance specialists Montfort International. “However, many migrants can make up their benefits by efficient tax and financial planning pre-departure utilizing the interaction benefits created by a Qualifying Recognised Overseas Pension Scheme (QROPS).”
If moving to Australia, specific care should be taken by anyone who has entitlements to a UK age pension
British state pensions remain payable to those who move to another country after retirement, but it is frozen at the rate it was when they leave Britain unless their destination country has an agreement with the UK. Unfortunately UK and Australia once had an agreement, signed up to by Australia which was subsequently cancelled – for some reason Australia agreed to no indexation of benefits from the UK.
“Should the case be won much of the win for Australian pensioners will be devoured either by taxation or by 40% of each £ won being deducted from their Australian Age pension - and its likely to be retrospective.” says Geraint Davies, Managing Director of migration finance specialists Montfort International. “However, many migrants can make up their benefits by efficient tax and financial planning pre-departure utilizing the interaction benefits created by a Qualifying Recognised Overseas Pension Scheme (QROPS).”
If moving to Australia, specific care should be taken by anyone who has entitlements to a UK age pension
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