International pensions advice- do you pay someone for it?

[Miljea]

Our pensions are a bit complex as about half of our funds are held in Australia, half in the UK.

DH is all for for paying a company to 'sort things' for us so we can access our Australian funds in the most tax efficient way possible.

I have no idea what the tax implications actually are, actually! I'm also not sure that we're going to be paying for a bespoke service better suited to 'tax avoiding' high net worth individuals, not Joe Bloggs, like us.

This is one company's breakdown (costs £3950): The other company we're looking at charges £4000.

Initial
Full Financial Plan (excluding pension transfers) £1450 (investment planning)
ISA (Individual Savings Account) Set-up £500
Pension setup £500
GIA (General Investment Account) £500
Life INsurance Bond setup £1000
Other investment setup £1000
Defined Contribution Pension consolidation/switch (up to 3 schemes) £1000
Extra schemes after the initial three £200 per scheme
Defined Benefit/Final Salary Pension transfers
Offshore Bonds £1000
Retirement Income execution year 1 setup £1000
Protection placement £50 for quotation and recommendation commission on placement
Complex Pension Income plan and execution involving Lifetime allowance planning £2000
Cashflow modelling £1500, then £500 per annum

Pension transfer advice service (full plan) £3950 minimum or 1%

Ongoing services and charges
annual management 1% of total market value
Silver service 0.75% of total market value
Purple service (1 additional review meeting) 0.95% of total market value

What do you think? DH has a Queensland government pension; mine is partly that and partly one separate one.

Sorry this is a very niche question, but, oddly, I know no one who is trying to get Aus pensions paid to Britain!

I have just rejoined MN to let you know you are being spectacularly ripped off with these fees. I am a dual UK/Aussie managing pension issue btw.

You can set up an account with e.g. interactive investor and create trading (general), ISA and SIPP (pension) account entirely free of charge. These cowboys want £1500 for doing that!? WTF

International pensions is like the wild west of financial advice. Can I ask who has quoted you these fees?

Thanks so much for doing that! I appreciate it.

BDH Sterling, and Cross Border Financial Planning.

One quoted the break-down I gave above; the other an 'all-in' of £4000.

Can you direct me to where I can get better advice? Thank you!

I am feeling pretty uncomfortable about it, if I'm honest, but I don't really know which way to turn. I am also amazed that our issues seem to be so 'niche'! We surely cannot be the only people in these circumstances! Our financial affairs are hardly convoluted; 2 pensions in Queensland's QSuper and one (mine) with another provider, (MAP), through another employer. No clever tax-avoiding/dodging funny arrangements!

To be clear, I only manage pension issues for dh and me, am not a financial advisor. I also deal with our pensions located in several other countries as both serial expats so appreciate the stress...the expat pension business is a pet peeve of mine.

You simply need to be clear in your head what you want Vs what is legally compliant, then minimise tax while enveloping excess UK income in tax wrappers here. It takes some time to research but that's ok and worth it.

Your situation will of course be specific to you, your age, pot size and cash flows. In general, you may want to leave Aussie pensions where they are, ask HMRC for tax residency cert, pass to ATO so they won't withhold any tax, then sadly your Aussie payments are classed as ordinary income when paid to you as UK tax residents and taxed accordingly this end (file self assessment to do this using approved HMRC software or directory). They are not covered by DTA.

Pointers: money motevator website for brokerages; Andrew Hallam blog for self managed pensions (you will read horror stories about expat pension scandals); UK pension advisory service. ATO and HMRC websites. These will give you foundations to evaluate external advice if you need it in both cost and value terms.

Did you check if you're eligible to plug any UK state pension gaps with class 2 NI voluntary contributions during the time you were employed in Oz (class 3 if you weren't working)? If not, please look into this ASAP...you cannot claim equivalent benefit for corresponding time spent in Oz unless you return on retirement and have low level of assets.

I hope that helps a little.

Ok, what are you actually trying to achieve here? Is it actually possible to transfer pensions from Australia to the UK? The taxation basis is so different you may not be able to.

We've been here 20 years and have superannuation in Australia that is staying there, I don't think we have any option to move it (both citizens). Small amounts in our case so will view them as a bonus when the time comes.

My mother has a widow's pension; she will have to maintain an Australian bank account for it to be paid into if she moves back to the UK or she will lose it entirely.

The breakdown you have posted smells to me like a company that actually has no idea about Australian pensions and taxation but is keen to sell you a product; if you agreed to let them do the work they'd probably get stuck / not be able to do what you thought they'd offered / come up with something that was not tax efficient in either country.

If you are trying to start taking Australian pension payments and get realistic tax relief on them (as the system there is designed for IIRC), I've no idea if there is any way to stop the UK viewing them as fully taxable income here. Withdrawing lump sums and transferring them might provide some options - I'm totally guessing here though.

So in your shoes I'd be wanting a company to quote me for advising me on my options, NOT for doing the work to set up their plan. Because until you know what is possible you can't decide whether to do it (let alone whether to do it their way). I have a strong suspicion there is no way to actually transfer an Australian pension so would steer clear of a "pension transfer" service in favour of a company that sounds like they might know something about the real issues. No idea where you could look for that advice, sorry!

Good luck investigating it.

OP- the breakdown you have posted looks like the standard tariff of charges that particular firm of financial advisers uses for different pieces of advice/ transactions. Where they refer to pension transfer advice work I expect they mean that is in relation to provision of advice specific to DB/final salary schemes (the FCA imposed strict regulatory changes in this area with effect from 1st October 2020).

Have you spoken to someone at either firm to ascertain that they have an appropriately qualified person that can actually help you? Most UK advisers can only advise on UK based schemes. You need someone who properly knows what they're doing and has experience of what you're trying to do.... the PPs above are giving you a good steer.