Independent pensions trustee Momentum Pensions has urged the UK pensions industry to maximise the opportunities the Australian lifetime allowance rules will bring.
The rules have seen the Australian government install a limit of AUD500,000 (GBP254,000) on non-concessional contributions – known as ‘after tax’ contributions – that can be made to Australian pension accounts. Under previous rules, Britons moving to Australia simply had to comply with an annual cap of AUD180,000 (GBP91,500).
Momentum Pensions points out that the new legislation will provide an opportunity for UK SIPP providers to work with advisers to maximise funding before the changes are officially implemented in July, 2017 and those advisers who need a non-Australian pension option to complement the newly capped Australian schemes.
It will also leave Australian advisers reliant on UK pensions advice – this is a complex area they will not have detailed working knowledge of. Pensions will also need to be structured so that up to AUD500k can be transferred across.
The new legislation has been compared to the UK’s pension freedom rules in terms of the impact it will have on Australia. Official figures show that in 2013, Australia was the biggest destination for those emigrating from Britain, with 43,000 British people moving there*.
Stewart Davies, CEO of Momentum Pensions, says: “A good provider with solid QROPs and UK SIPP options will be well-placed to work with advisers who need a non-Australian pension option to complement the newly-capped Australian schemes – and when you think about the significant number of people who emigrate to Australia every year, the rules will affect a lot of people. In addition, there is a strong opportunity also to work with advisers on the current basis to maximise funding until the changes are implemented next year in July.
