UKC

On the back of some other monetary topics, what do UKH/C class as a good pension amount?

One of my work colleagues is taking early retirement next year, he'll be 60. Lump sum of 58k. Annual pension of 15k. He will have payed into our FS scheme for 35 years.

Does that sound ok ??

In reply to arch:

I'm guessing he's on about 35k/year, if so it's a decent FS scheme. Sadly those days are gone for most, or soon will be. If he gets state pension on top of that once he's eligible, then I don't think it's bad at all.

In reply to arch:

Depends how much he has paid in and what his salary is but it would cost an awful lot to buy that as an annuity.

In reply to arch:
I'd be interested in what people think is "reasonable" too.

Our situation is that me and the wife may return to the UK to live, as retirees, in anywhere between 5-10 years time.

We will have a mortgaged paid home there (Cornwall).

What sort of annual income would give a reasonable standard of life, for two people who have no major outgoings?

In reply to stroppygob:


It really depends what standard of living you are used to. Will you want to run a car, or even two. Will you want to holiday regularly. Do you like going out to eat / drink.

In reply to The New NickB:

One car, probably with a campervan for holidays. We love going out to eat, but prefer to save it up and go for one top class meal every six months or so, rather than eat out locally/regularly for the sake of it. (We're both fine dining quality cooks.)

In reply to stroppygob:

Bear in mind £10k+ personal tax allowance and 20% lower rate tax band means, as a retiree on a normal retiree's pension/income, you won't pay too much tax.

In reply to stroppygob:

Running a modest house (Council tax, gas, electric, water, insurances, internet etc plus a little set aside for maintenance) probable costs a minimum of £3k-£4k a year.

A newish small car with a low tax band, doing 8k miles probably costs £1.5-£2k a year to run assuming it is bought and paid for, you could easily double that with something a bit more exciting. I don't know about camper vans.

I guess you know UK pub and restaurant prices. Shop bought food and drink is fairly good value by international standards, but if you like to eat reasonably well and include the odd bottle of wine or real ale in your basket, you will probably be spending at least £100 a week on food.

In reply to The New NickB:
Thanks Nick mate, seriously, thanks.

They are useful figures.

We hope to retire on my wife's final salary pension, should be (at current exchange rates,) 36,000 quid. My pension will add another 15,000 quid to that.

It would seem, rates remaining relatively stable, we'l be ok on that.

In reply to stroppygob:

Just a thought on car ownership, your Aussie insurance arrangements may not entitle you to any no claims discount and insurance costs tend to rise again over 50. First few years of UK motoring could be a bit more expensive. Although it looks like you will have a more than adequate income.

In reply to The New NickB:

Thanks Nick. I tend to forget about how expensive car insurance is there, as third party cover is provided in our tax disc (aka Rego,) here.

In reply to stroppygob:





Jesus Christ Stroppy, thats a combined income of £51,000 and no mortgage and only two mouths to feed, you are practically a millionaire compared to most working families.

In reply to stroppygob:
Yes, I was trying not to react too much but your pension will be very large compared to your average person in the UK. Just plugged it into a quick calculator and your combined monthly income post tax would at current rates be around £3,750. You'll have more money than you know what to do with.

This will place you very high in the following survey of household incomes in the UK, for a couple with no kids, and most of those incomes will be people working with the inevitable mortgage to pay. Not that that necessarily means that much but I think you can rest assured that you will live very comfortably indeed.

http://www.theguardian.com/money/2014/mar/25/uk-incomes-how-salary-compare

In reply to stroppygob:

That isn't a reasonable pension - it's exceptional. A fairly wealthy man could save for a lifetime and not be able to buy that sort of a pension. At a guess I'd say with that sort of income you will be in the top 10% of pensioners income.

In reply to M0nkey:


If it was a defined contribution pension and you had to buy an annuity, I think you'd need a fund of almost a million quid to get a £50k a year pension (annuity rates c5%?)

In reply to Skyfall:
Sounds good until the realities of old age kick in. Even with an upper quartile pension following serious illness things like carer costs will eat most of your wealth. It's a massive concern as we need to incentivise the young to save (as broadly speaking they are not) and yet given the current system why should they unless they smell the risk of even bigger cuts in the state safety net? Only the super rich don't need to worry in the Uk.

In reply to andy:

Annuity rates in the UK are an embarrassment and show just how poor the companies involved mange these funds. The best iSA's yield much more. Yet they do protect you from some means testing so those now considering not to take one out (following recent changes) need to think carefully.

In reply to Offwidth:

I think it's imperative to be mortgage free at retirement (or close) if you can be. Obviously not possible for many, but certainly it's one of my main focuses and I class it as part of my pension provision.

In reply to Offwidth:

Interesting point re. means testing.

In reply to stroppygob:


When I came over here from Oz I brought with me proof of comprehensive insurance (NRMA) and no claims with me. It was accepted by my insurer over here. But that was in 2001 so things may have changed

In reply to Bjartur i Sumarhus:

Why? Insurance is often good and if your pension is Ok and the mortgage isnt huge here are few affordability issues. Owning the house outright doesnt stop liabilities being raised on it.

In reply to Offwidth:

I'd put in more strongly - paying off a mortgage well before retirement is imperative so there is sufficient time to save for a comfortable retirement (and a house that can be sold if needed for care etc.)

In reply to MG:

Thats one of the unspoken individual risks to lower earners. The top line state balance sheet risks look low as benefits are much poorer now, yet the hidden state risks are also worrying: even worse deals for annuities as the pot shrinks; overheating of alternate investment markets ( like buy to let): more social pressure on the benefits area when many of the ill advised mess up. We need annuity reform (the fact you cant have an option to cash out is as big a scandal as the shit rates some offer) and a bigger and better state pension, not more hidden risk for responsible lower earners who almost by definition will struggle to afford good independent financial advice.

In reply to MG:

I know plenty of middle class pensioners who have good financial advice and think differently. It depends on your priorities, some like a bigger house in a nicer area and trade off for more frugal external expenses. As for carer costs liabilities on a house are deffered but on other investments may not be..

In reply to MG:

I would agree with that. Overpaying saves thousands in the long term, shortens the term of repayments and allows you to top up towards the end of your career.

Personally I don't want to be wasting pension on a mortgage I had 25 yrs to repay

In reply to Offwidth:

I'm not sure who you are preaching to? Yes, from close personal experience, I am well aware of the costs of ageing, carers etc. However, unless you are very wealthy, a decent final salary pension scheme (as per stroppy's) is about as good as you are going to get.

Most of us trying to fund pensions will find the recent pensions changes a boon. Put simply, it's now less worrying putting money into a pension fund, as it will be a lot easier to gain access and it won't feel quite so locked away. That should help people save. Of course, if they further water down the tax breaks, it won't be even as attractive as it is now. Which will probably further fuel the property market as you will see even more people buying larger of second properties as their main pension fund.

Those of us running our own businesses and who don't have employer/public funded pensions, never mind final salary schemes, are all too conscious of the problem. In fact, I have to decide before tomorrow how much to put into my pension this year bearing in mind all the other complicated cash flow considerations I have right now. However, you do have to take a long view (rapidly becoming a medium term view for me...) and hope nothing happens to make it seem a mistake in hindsight.

In reply to Offwidth:

In my view, only an idiot would buy a nice house in a nice area that they couldn't afford to repay, but only service throughout their retirement. But i'm sure their FA's love them

If I want a nice house in a nice area, I make sure it wont saddle me with debt for the rest of my life. But you're are right...we can all justify our actions to a certain degree.

In reply to Bjartur i Sumarhus:

Im not talking about irresponsible behaviour or unaffordabiliy. If you are a retiring on a final salary scheme with half your final pay index linked for life, as many of my colleages are, why cant you afford a mortgage well within that income.

In reply to Offwidth:

Good for them, but your colleagues on FS pensions of 50% are going the way of the dodo. The bulk of us have DC pensions that won't be index linked and as such , it makes prudent sense to be mortgage free, unless you think paying interest on debt is the sensible course of action when you no longer work.

In reply to Skyfall:

What preaching? I'm just trying to point out Pensions are complicated and even those considered wealthy can get in trouble through no fault of their own. The private vs public argument was a choice: things looked much rosier in the private sector when I chose public and future uncertainty is to be expected.

People are getting insurance protection repayments where these schemes were pretty obviously dumb yet much greater scandals in the various forms of saving for retirement remain unsupported. I already said I think annuities needed a shake up but the lower end of the income scale using these deserved more protection...scandals in waiting to add to the catalogue of these from Maxwell onwards.

In reply to Bjartur i Sumarhus:

They worked hard, got good jobs and paid for the benefits they will accrue, so such sniping is pretty low. The fact remains keeping a mortgage can be a viable option if it suits your lifestyle.

In reply to Offwidth and others:

There are also a lot of people out there for whom the paid off/unpaid mortgage isn't a question as they aren't in a position to have a mortgage... heading into retirement knowing one has to maintain rent payments would be a daunting prospect but many have no choice.

In reply to Offwidth:

I'm sniping? I think you have misconstrued my post..i'm just pointing out that your select group that support your argument are in a fantastic position that most won't enjoy.

Of course it's viable. But I would rather keep my pension money for other things than paying compound interest on debt to keep up appearences

In reply to Tall Clare:

Indeed. My concern though is that things are set to get much worse in the next few decades and very little seems to be being done to deal with that.

In reply to Bjartur i Sumarhus:

It may be a select group but its a significant one if you go to places like the Lake District where it pushes up prices. Yet if people love the Lakes and can afford it they will go.

In reply to Offwidth:

What do think should be done that isn't? Basically we (the population at large) have a choice of dying younger with a good pension as occurred until recently, or living longer and being poorer (or working longer).

In reply to MG:

I think the idea of early retirement will disappear, to be replaced by people finding ways of working (where possible) that they can do for longer. The idea of working between, say, 20 and 55 - i.e. 35 years - will come to seem like a curious idea in a life that spans 90 years. Hopefully the obsession with youth will wane, so people recognise that people in their 50s and 60s are just as (if not more) useful in the workplace.

All a bit idealistic but hey, that's me...

In reply to Tall Clare:

I think you are right, and that part-time working in old age will become much more common. Not such a bad thing in many respects.

In reply to Tall Clare:


OK Clare, but something has to happen to them, we can't go on like this or it will be a disaster with millions of homeless out of work people starving to death. The government has to get a grip of this and sooner rather than later. The only answer I can forsee is to raise taxes enough to support the system as it is, or alternatively change the whole system.
It is not down to individuals to sort this one out, it is up to the government, if it means we have to restrict the population somehow, and I'm not suggesting this is the answer, then less immigration and taxing babies might be the only way, terrible though that choice would be.

In reply to Tall Clare:

Among my friends there is a massive gap. There is one section (mostly teachers, it has to be said) who are taking early-ish retirement like billy-o and swanning off on (ever longer) holidays while they are still fit enough to enjoy them. Needless to say I am mostly deeply jealous, but with two kids still to get through uni that is not an option for me.

Then there is another group who when I say I would like to retire (I'm 60) they look at me as though I'm completely bonkers, and don't seem to have any intention of retiring, they're happy to carry on indefinitely.

In reply to Rob Exile Ward:

I do think that some careers exhaust a person much more than others - at risk of starting one of 'those' arguments, I do think teachers must be knackered after 30 years of dealing with kids.

In reply to MG:

I've already mentiined the key areas, how many more do you need . Various pensioners reform groups argue, very logically for sensible costed change with hardly anyone in politics listening. There has been progress over the decades but too slow and often with big steps back.

In reply to Tall Clare:

TPS Evidence is mixed. Teachers used to die younger than many professions now despite the job becoming more stressfull they seemed to be living longer. This might be influenced by a bout of ill judged and expensive early retirements on vague ill health grounds and enhanced early retirements in restructures from up to 15 years back which these days have quite rightly been stopped.

In reply to Al Evans:

"taxing babies" that is the most radical idea I have come across in these forum in a long time. Given they are subsidised today (child benefit....) that would entail a change not sure any government would want to even bring up, they would never get elected again. So other ideas required.

In reply to orejas:

The problem with pensions is that people are living longer and that there is an insufficient tax intake from the working population to support the current retirement age.

Taxing babies would be an extremely short-termist policy, as it makes both of those problems worse in the medium (>18 years) and long term (<70 years).

In reply to orejas:

Better financial education at school. Much more proactive govt backed advertising on the benefits of pension saving and the bleak future without. Means testing pension pots and removing state pension from those with , for example, £750k at 65.

In some ways, good chance Generation Y (is that the right one?) will be the posterboys of how not to retire for the Z's and they will be much better savers.

In reply to Bjartur i Sumarhus:


Totally agree with this - it's one of the most important things a person will learn.

In reply to Offwidth:


Not sure what you mean - you mentioned "bigger" state pensions and that annuity rates were rubbish. Not sure either can be changed really.

In reply to orejas:


It was done in China, up to quite recently.

In reply to arch:



Not too shabby I'd say, I'd be delighted with a 15k pension on top of my state pension. It's more than I get for working part time past retirement age and am likely to do so until I'm at least 70 -- It's a good job that I enjoy my work for a great company.

On the other hand, My sis and her hubby who are both teachers are complaining about how badly off they are going to be until their state pension kicks in yet are getting more than that!

In reply to Tall Clare:

Nobody has addressed my answer to your post, what do we do with the millions of homeless, starving, pensioners dieing on the streets if the government does not come up with an answer.
When I was a kid we used to have sociology classes at school telling us that in 50 years time (now) everybody would be retiring at 50 because of the technological revolution and working 4 day weeks. Instead we have people working 60+ hour weeks and all this fight about pensions. I think if Thatcher hadn't come along and killed the unions we might have better working conditions more equality less unemployment and reasonable provision for the old, but all that's too late now, she did and people bought it, and we are facing a disaster.
Instead of technology benefiting the man in the street it just came to line the entrepeneurs (exploiters) pockets, something has to be done to reform tax and pensions and health provision, or millions will die homeless and in starvation.

In reply to Al Evans:


Just leave them Al. They smell a bit in summer but no real problem. If it got to tens of millions of corpses we might have a problem.

In reply to Al Evans:


Sorry Al, but you are miles off the mark. Yes, there are a lot of poor pensioners, but there are also quite a lot of well off pensioners and whatever your view, the current level of welfare in this country is not bad by world standards. You certainly don't see pensioners sleeping on every doorstep as you might have us believe.

And technological advancement has never benefited the man on the street and has always benefited the entrepreneur. In the next 50 years I foresee the professional driver becoming a thing of the past for example. You can either foresee such things coming along and adapt, or wait until you get shafted by progress and then blame the government of the day. I know which I will be doing.

In reply to Al Evans:

I don't think you can underestimate how much people's expectations have risen. Yes there are terribly poor people - but a lot of those who are working so hard, for such long hours, and into their 60s, is because they want 'stuff' - things that were undreamed of by my parent's generation.

Stuff like 2nd cars, toys like boats and motorbikes plasma TVs and rideon mowers, Agas, deposits for their children's homes, 2 or 3 foreign holidays a year... These aren't the expectations of a few well heeled capitalists, whatever you may think, these are normal aspirations of many, many working people.

Many of us if we consumed less, downsized, led simpler lives, could exist on far les. We're stuck in a hamster wheel.

In reply to Rob Exile Ward:

Spot on!

In reply to ByEek:

None of these answers address the problem, it IS going to happen how ever much you try and rationalise it, old people will not get living pensions under the present system and kids will not get jobs, wake up! There really will be millions of old working class pensioners and kids unable to live on what the state provides unless the government re-thinks a whole lot of things.
Stuff that should have been done years ago, and which Gordon Brown was instrumental in, screwing up the pensions system, few in the short sighted younger and middle generation realises just how bad Thatcherism was and how much it has screwed up the UK's future, can somebody on here please answer my question about what we are going to do now? As a nation, not as a load of self centered individuals?

In reply to Al Evans:

About what? There is I think a universal pension planned of about £7k/year and various other benefits too. This is not much but enough to survive on. There won't be people dying in the streets. Unemployment is dropping rapidly.

In reply to MG:

Pie in the sky ;-s

In reply to Al Evans:

Eh? No, that is the situation.

In reply to Al Evans:

Al, you need to calm down a bit. 'old people will not get living pensions under the present system' - er, but they do. By the time my Mum died her state pension and benefits were accumulating faster than she had any desire to spend them, and AFAIK the situation for poorer pensioners has improved since then, not worsened. It's us poor bl**dy middle classes, with too much money for benefits, not enough to live a life of riley - that should be moaning (only I'm not.)

'and kids will not get jobs' Maybe not, but anecdotally we are continually looking for staff to train up; we run just two small business but if the right 18 years olds turned up on our doorstep tomorrow we would employ them.

Don't believe everything you read down there in the sunshine.

In reply to arch:

.....................So!! How much IS a decent pension ??

In reply to arch:
Pick a number you would like to retire on (say £30k), then multiply it by 25 (£750k), then use that as a rule of thumb ( assuming 4% annuity)that you will need to have saved.

Lots of other factors as discussed above, but thats about the best I can do to help you find an answer.

In reply to Al Evans:


kids live with their parents into their 30s, briefly leave home and then their parents come and live with them. Simple, or don't have kids and be loaded with cash by the time you retire.

It's not up to the state, this isn't Sweden! As a nation we are a load of self centred individuals, that's why we voted the Tories in, that's why we always want lower taxes instead of a better country and that's why we want to cripple anyone who has the audacity to "scrounge" from the state. This is Britain, right wing, conservative, I'm all right Jack, go f*ck yourself Britain. Welcome to democracy, things are going to get a lot worse.

In reply to Rob Exile Ward:
Irrespective, pension reforms would still help the UK economy as well as being fairer. Lets not forget all those currently comfortable pensioners are paying tax and not only are the benefits requirements for future struggling pensioners set to increase, the income from the next generations of comfortable pensioners is set to drop.

I see a lot of the current problems as being down to the increasing dominance of neo-liberal market theory. Aside from not really caring about the poor (with the social consequencies of that) many economists argue this leads to volatility, especially the underrating of pension values in difficult times so putting extra pressure over and above down-turns in performance. As an example, having seen quarterly USS valuation changes in detail where there were times with no real change in asset values, there have been huge short term swings in market liabilty based on simplistic assumptions, which of course mean large changes to the valuation: its obvious something is seriously wrong with this current system.

Another current idea is that people are going to continue at the same rate to live longer and longer. This has happened so far because health care has steadily improved for a generation of already relatively healthy individuals. Looking at school kids today compared to my time and extrapolating, all alongside the unrealistic funding needs of just keeping the status quo in the NHS, I seriously doubt if these increasing longivity predictions are realisitic. I see an increasing divergence between the longivity of the comfortably off and the poor, as is already reportably happening in the USA.

I'd prefer to live in a more socially responsible state where good basic pensions are a higher priority but properly accounted for.

In reply to Sharp:

They claim each child costs approx £150k to 18,if you're still at home at 26 then you probably cost your parents even more. But do childless couples spend the money on themselves rather than squirrelling it away?

In reply to Bjartur i Sumarhus:

Add an extra 50k or so of debt for going to Uni which according to reports last week may even end up costing taxpayers more than the old £3k fee system and even on the best estimates is barely in profit.

In reply to Offwidth:

'which according to reports last week may even end up costing taxpayers more than the old £3k fee system '

You read that here first, if you look up my posts on the subject a year or two back it was ALWAYS an accounting con. The government still has to borrow money to 'lend' to students, because universities need to be paid in cash today; the sleight of hand is that because it's a 'loan' the value of the loan is offset by the 'asset value' - the loan book. So the government is borrowing the same amount as it is becoming owed.

Only because many students won't ever have to pay it back the government in the future - and our children - will still be out of pocket.

It was always a con, and a clever one at that.

In reply to Offwidth:

Yep, and again it comes down to disciplined saving. You have a child. You know you have 18 years to save some money towards uni fees. To me that is obvious. But I think I am in the minority.

It comes back to financial education again. You take your baby for it's first check up. Give the parents a leaflet on saving for Uni showing how the compounding interest or dividend accumulation and reinvestment over 18 years can be a powerful tool and it doesn't have to be unaffordable.

<ok, I admit that does sound a bit ridiculous, but is it a bad idea?>

In reply to Rob Exile Ward:

One key benefit was always that student loans, like PFIs, were off-balance sheet. Made the debt performance of the government look better through sleight of hand.

In reply to Bjartur i Sumarhus:

and those on low incomes who can't afford to save for their kids to go to uni? just don't send your kids to uni unless you're rich? It's great, like going back to the olden days. forward the plan to Michael Gove , he loves that shit.

In reply to Bjartur i Sumarhus:
As a bright kid put in a time machine to the nasty modern world I'd get a job with someone who would pay me to go to Uni.

Frankly conservative advice at school is useless if we stand on financial quicksand; financial skills to budget and help spot the BS would be more useful. I say save where you can comfortably but also enjoy life in case things go horribly wrong later: one of the saddest things I have to deal with is those who die just when the benefits of self imposed austerity are about to finally reap the benefits.

As someone with a great career and good pension, having climbed widely and worked to help the future of climbing and contributed a lot to other socially useful areas where I can, I'm facing no regrets, even if I'd love to keep going this way for decades yet.

In reply to arch:

There is no right answer to that and will vary from person to person, but for me a decent pension is one that covers your current and anticipated outgoings plus a bit left over for a rainy day and luxuries*. This can vary hugely depending on whether you are a home owner, with or without a mortgage, or rent. The big unknown is inflation and the eroding effect that will have on your pension.

*Luxuries are subjective and depend on the sort of life style you want to lead. Eg Running a car, going on holidays, eating out, presents for family and grand children, climbing (gear, travel expenses, wall fees etc)

In my experience and that of others of a similar age to myself, most people underestimate just how much they are going to need when they retire, and don't plan sufficiently well enough.

In reply to arch:

thats a 58k lump sum and 15k a year more than i'll be getting

In reply to Al Evans:

Bit of perspective. My wife has worked in Public Service since she was 17*. She's contributed 5% of her earned income to her superannuation scheme for the whole of that time. She's now 50 years old, and will retire at the earliest age, possibly in 8 years time.

I've only worked in Aus for 12 years, but have contributed 10% of my income to my superannuation scheme. Obviously our employer also makes a contribution to that scheme.

On top of that, and not included in my calculations above, will be our Aussie home, if we choose to rent that out, rather than sell it it, at current rents, would fetch us another $1500-$2000 pcm (£838 - £1,117 pcm) to use.

So yes, we may be in a very enviable situation, but this depends very much on exchange rates, and the Aussie economy not going tits up.

If I had stayed in the UK I would have just awaited the pittance which is a UK pension, phew!



*Like me, the wife left school early with no qualifications. She's worked herself up the greasy pole, and I now refer to her as "Sir Humphrey", as she is in charge of the office of the Minister for Justice.

In reply to Skyfall:


What taxes are payable on a foreign held superannuation?

In reply to arch:

In reply to the original question:

If you are mortgage free (big if) then I reckon between £1000 and £2000 per month is a good pension depending on how luxurious you want your life to be.

I think the state pension pays about £600 a month or thereabouts to my Mum and she gets a BT widows pensions of around £600 as well. I keep telling her she takes home more than many families.....sad but true

In reply to stroppygob:


This should help answer that:

http://www.hmrc.gov.uk/pensioners/paying-abroad.htm

In reply to Al Evans:


I agree that there is a potential mess, but I disagree that it will spell disaster. The conclusion I have come to about society is that it is generally very resilient and the doom and gloom spelt out by folks like yourself rarely comes true. My prediction - that older people work for longer and the younger unemployed are older when they leave home. No ideal, but certainly not a utopia of homeless pensioners on the street.

In reply to arch:
I think the 'Living Longer' argument is a red herring and will stabilise on the relatively short term.

My reasoning for this is that post the German occupation of Guernsey the UK government did a study on the health of the population that survived. They were pretty much all very healthy and all the privations of the last year or so of the occupation had been possibly beneficial to those that survived.

The current older generation were bought up during a period of austerity and rationing and I think that has had a greater effect on their long term health if you take out factors such as widespread smoking etc.

I think we have to see what the long term effects of modern living are to know if the actual longevity of the population has peeked and may yet decline, or is indeed set to rise further.

In reply to SteveD:

As I said earlier, with reasons, I think the range will widen and the average hold stready or drop as the comfortable on average will live healthy lives and find good healthcare affordable and the struggling will on average do the opposite. We are slowly building a US like underclass in the UK as we speak.

In reply to arch:

To answer your question. Right now, that is a very good pension.

If the cost of living increases greatly, in 20 years it might not seem as good.

I'd be happy with 15K a year, thats plenty. Don't you think £15K pure disposable income if your house is paid for is a good income?

In reply to stroppygob:
Well, if you leave your adoptive .. country and take up residence in the UK again, you will be fully subject to UK tax on your worldwide income (incl pensions). That is subject to anything in the UK/Aus tax treaty which says otherwise, and it doesn't. What it says is:

1 Pensions (including government pensions) and annuities paid to a resident of a Contracting State shall be taxable only in that State.

The wording of that clause is important as it says it can ONLY be taxed where you reside. Therefore, if the Aussie authorities also want to tax it (which as Aus source income they might otherwise want to), they can't. If there is withholding tax (eg. something similar to PAYE) locally in Australia, you should be able to apply in advance to get it paid to you gross in the UK. I know you would be able to the other way around ie. someone leaving to retire in Aus, and assume they will do likewise.

Just whacked in a load to my pension fund today so this is all very relevant (apart from the emigrating bit!).

There are a number of other things you should be thinking about from a tax perspective before moving to the UK, particularly as your wife would be non-dom, at least initially. Drop me an email if you want.

In reply to Blizzard:



Our pensions are index linked.



I've not really thought about it TBH. It was only until my colleague had he figures that I've considered it. Still 10 years left for me. We also do a lot of overtime, so our disposable income is a lot higher than the pension would be. But my friend is very frugal, so IMO, he should be alright. He on the other hand, isn't so sure.

In reply to Graham Mck:



Many thanks mate, lots of useful information there for us.

In reply to Skyfall:

Thanks mate, will do that later today!