Further to the UK imposed pension transfer deadline of 6 April for those who had worked in the British public service, 1000s of Australian residents have seen their pension transfers frozen by the UK Government.
Those affected by the transfer freeze include Britons who have been employed as teachers, nurses, police, etc. and have moved to Australia, as well as Australians who have worked in Britain in such public service roles.
The freeze has occurred due to a difference in rules between the two countries in regards to early access of pensions. Under Australian regulations, financial hardship can trigger early access, but this is not available in the UK.
The benefits of transferring UK pensions to Australia include having no restrictions on accessing funds after 60 years of age and having no tax paid on such withdrawals. In the UK, an income stream is generally paid, which is assessable for income tax, and only the first 25 per cent is usually tax free.
For those who have already had pension transferred recently, there could be a British tax liability due to be paid.
Find out more at Sterlingplanners.com.au
