Retire to Australia | Retiring to Australia
If you are British and want to retire to Australia, you need to be over the age of 55, have assets worth at least 312,500 GBP and access to a pension income of at least 40,000 GBP per year for 2016/17.
For Brits already retired in Australia, retiring to Australia and Australian expats returning to retire to Australia, please scroll down to our “transferring a UK pension overseas” section where we will show you how to transfer a UK pension abroad and pay zero income tax on your retirement income in Australia as well as choose the currency of your pension and pay no tax on death as long as you are retiring in Australia.
Brits retiring in Australia must also make the necessary “designated investment” of 750,000 AUD (470,000 GBP) to buy Australian government treasuries. You will be paid interest every six months and you get your full capital back after four years if you retire to Australia.
People who wish to retire to Australia and get a retirement visa for Australia must be over the age of 55 with the exception of your spouse who does not need to be over 55 years of age to qualify; you cannot add any dependents to the retirement visa. People who apply for the standard retirement visa in Australia will be awarded a temporary visa at first, which is valid for four years.
You must have assets or combined assets with your partner valued at least 750,000 AUD (approx. 470,000 GBP) to apply for a retirement visa in Australia.
If you want to retire to Australia, your assets must be:
- legally owned and lawfully acquired by you (or you and your partner)
- capable of and available for transfer to Australia
- exception: If you intend to live in regional Australia you only need assets or combined assets valued at 500,000 AUD or more (312,500 GBP)
- You (or combined with your partner) must have access to a minimum net income of 65,000 AUD per year (40,000 GBP)
- If you intend to live in regional Australia you (or combined with your partner) must have access to a minimum net income of 50,000 AUD per year.
- You must make a designated investment of 750,000 AUD (or 500,000 if in regional Australia) into Australian treasuries. Repayment of 100% of capital invested is guaranteed by the Australian State or Territory government.
The Investor Retirement visa for Australia (subclass 405) is for self-funded retirees over 55. You can be inside Australia or apply for the Australian retirement visa before you travel there. The cost for an Australian visa us 325 AUD for yourself and 165 AUD for your spouse (correct as of 27th October 2016).
Why Retire to Australia?
- If you want to leave the UK, everybody in Australia speaks English
- 1,200,000 Brits are already living in Australia
- You can transfer your UK pension to New Zealand and pay no Australian income tax on your pension income as well as avoid any tax on growth and death as long as you retire to Australia
- Australia is a member of the Commonwealth
- Australians love sports: cricket, Australian rules football, rugby, tennis, golf and yes, even soccer, err… I mean football
- The beaches, the weather, the surf, the BBQ’s, the laid back attitude, the environment, the wildlife
- You can transfer your British/Irish/Dutch pension overseas and pay no tax in Australia on retirement income, growth or death
- The downside are prices, house prices / apartments are now significantly more expensive than in the UK; going out for dinner and drinks can be more expensive. It is also far to fly anywhere, Sydney to London is nearly 23 hours away and it is 9 hours from Sydney to Bangkok. Even New Zealand is a four hour flight away
- Other issues: the UK state pension does not rise with inflation in Australia, it is frozen
The average house price in Australia is now double the price in the UK.
The average price of a house in Australia (the median) in 2016 is now 720,000 AUD or approx. 450,000 GBP.
The average price of a house in the UK is £218,964. The average house price in London is 440,484 GBP.
The average price of a house in Sydney is $995,804 (620,000 GBP) and apartments are $656,166.
The average price of a house in Melbourne $707,415 and apartments $435,674
You can get a free Australian house price estimate before you retire to Australia.
Click here for the cost of living in Australia if you are thinking of retiring in Australia.
Transferring a UK Pension Overseas if You Want to Retire to Australia
If you are British, Irish or Dutch or an Australian expat with a UK pension already retired in Australia or thinking of going to retire in Australia, you need to consider what to do with your UK pension.
You have a number of options, but right now, we think it is easiest to transfer your UK pension to a Superannuation Scheme in New Zealand. However, that NZ scheme must be registered in Australia and on HMRC’s ROPS list.
- Keep your pension in the UK: you are allowed full flexible drawdown, but will pay UK income taxes at up to 45% and UK tax on death after 75 of up to 45%; also, usually you can only keep your pension in GBP
- Transferring a UK pension to an Australian Super Scheme is not allowed
- Transferring a UK pension to an Australian SMSF (Self Managed Super Fund) is allowed only if you are 55 years of age and above, also there are many caps on the annual amount you can bring into Australia. Click the link to read more.
- Transferring to a NZ Superannuation scheme which is Australian registered is the newest solution. This allows you to transfer your entire UK pension in one go and pay zero Australian income tax. You can choose to invest your pension monies in a managed GBP or managed NZD pension fund
Moving AUD to GBP if You Want to Retire to Australia
Bank to bank money transfers are fairly expensive. There are now cheaper ways to move money around using currency transfer specialists. Check out this article concerning a money transfer to Australia.
By the way, if you are travelling around Australia or want to retire to Australia, you can get a free car hire with Transfer Car Australia. It is well worth checking out the link.
What is the Official Retirement Age Australia?
Retirement Age Australia – The official retirement age in Australia for the last 20 years has been 65 years old to claim An Australian state pensions. This is all about to change. In July 2017, the retirement age in Australia jumps up to 65.5 years old, then to 66 in July 2019, increasing by six months every two years until it hits age 67 in 2023.
That means, if you were born in January 1957 or later, you won’t be able to retire in Australia and receive an Australian state pension until you turn 67 and it looks like they will probably have to push the age out to 70 by the year 2035 due to the ageing population problem.
Baby Boomers now expect to live an average of twenty years longer. If you are 55, statistics show you’ll live on average another 31.02 years if you’re a woman and 27.71 if you’re a man. That is age 86 and 82. That also assumes no cure for cancer or other medical breakthroughs.
According to McCrindle research, baby boomer in Australia, those aged between 45 and 64, may make up less than a quarter of Australia’s population but they hold more than half of Australia’s wealth.
The top 20% of the richest Australians hold 62% of the country’s private wealth while those at the bottom end of the scale have less than 1%.
In the UK the pension retirement age is currently 65 for men and 63 for women.
The plan is for the age to be equal for both men and women by 2018 at which time the retirement age will be 65.
The Telegraph shows that the retirement age in the UK will then rise to 66 by 2020 and 67 between 2026 and 2028.
Beyond that, it looks like a rise to a retirement age of 68 could happen between 2036 and 2046, but I think it will rise to 70 before that as medicine gets better and people live longer.
Retirement in Australia
If you are retiring to Australia, the Australian retirement system ranks third globally behind only Denmark and the Netherlands, receiving a B+ rating. You can apply for an Australian pension if you are working in Australia.
Australia’s compulsory employer contribution rate is currently frozen at 9.5 per cent until 2021, after which it is scheduled to rise 0.5 per each year until it reaches 12 per cent in 2025. That is far higher than the pawltry 1% auto enrollment rate minimum paid by employers in the UK.
Even so, how important is the Australian Superannuation schemes if you want to retire in Australia. According to the Grattan Institute, they are calling for a radical rethink of Australian Supers as analysis reveals it is the least important part of retirement income and likely to stay so for the foreseeable future.
Australian Super savings account for only 15% of the wealth of most Australian households, because even without counting the family home, the average Australian saves as much outside as inside the Australian Super system. So, for those thinking of retiring in Australia, you should talk to your financial adviser about the best way to invest your savings both inside a Super and outside.
You can access an Australian Retirement Calculator here.
Please contact our advisers if you want to discuss retiring to Australia or transferring a pension to Australia.