Guest Rover

Life Insurance / Pensions

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    Guest Rover

    HI,

     

    As a rule, what happens with Life Insurance policies that people have been contributing to for years in the UK, when you emigrate to Oz?

     

    Does it automatically become void because you are out of the country?

    Can you continue paying the premiums each month (do you have to do it from a UK account or can you do it direct from an Oz account?)?

    Can you transfer them over to an Australian company (or only if the two are part of the same corporate family?)?

     

    While I'm on - does the same apply to pensions?

     

    Thanks

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    Hi Rover,

     

    We are still paying our life insurance. It's with legal and general. We rang them up and told them that we were leaving the UK, and moving to Australia, they said it was not a problem as long as we paid it would still be valid.

    We started paying ours years ago and our premium is very low, so we decided to keep it going. We still have our UK bank accounts and the payment goes out dd every month.

    Sorry but can't help you with pensions.

     

    Prema

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    Guest wijaya

    We did the same with us. I am with the direct line. I have been told that as long as I pay, there is no problem where we live. I asked because I was selling my house.

     

    But the things that I am not sure is what's the benefit with life insurance? Is only that you are covered if something nasty happened to you or will you get any money back when you reach certain age?

     

    regards

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    Hi I'm with Legal & Gen too they said it was fine so long as it came out of a UK account.

     

    Life Insurance depends on the cover you have requested, mine for example pays out on terminal illness or death, just means my family can cope at least for the 1st year and pay off any debts etc without worry. There is no pay out at the end of term unless the worse happens.

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    Guest WhatNow?

    Since no-one has mentioned pensions, I'll add my bit as I'm in the process of moving mine at the moment and there are a few considerations here. You can leave your pension in the Uk as long as you like but the implications will depend on a few factors such as your age and your residence status. If you bring your pension over here within the first six months of arriving you pay no tax on any increase in its value in the interim (that's if it HAS increased in value at all in that time!). After that six months, in theory, you will pay tax but only on the increase in its value. When you transfer your pension into an Australian Superannuation fund (and that is what you have to do) you have to leave it there for a minimum of 5 years (not a problem if you have more than 5 years anyway until you can claim it). If you decide not to transfer it and when it falls due you claim it in the UK and transfer the funds, it will be classed as foreign income and thus will be liable to tax at the Australian level current at the time (as is your UK state pension). If you are confused about the implications of this then PM me and I can put you in touch with a good Financial Adviser who specialises in pension transfers from the UK.

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    HI,

     

    As a rule, what happens with Life Insurance policies that people have been contributing to for years in the UK, when you emigrate to Oz?

     

    Does it automatically become void because you are out of the country?

    Can you continue paying the premiums each month (do you have to do it from a UK account or can you do it direct from an Oz account?)?

    Can you transfer them over to an Australian company (or only if the two are part of the same corporate family?)?

     

    While I'm on - does the same apply to pensions?

     

    Thanks

     

     

     

    Hi Rover

     

    I will try to help answer some of your questions:

     

    Life Insurance

     

    This will depend on the conditions in your application at the time you applied for it. Some life insurance companies will allow it to continue as stated above others will not.

     

    The best thing to do would be to contact the provider and ask them what their policy is/was when you took out the plan.

     

    Usually if it is still allowed to be kept in force you would have to pay it out of a UK Bank account. I would also recommend that if they do say it is still valid whilst living and working in Australia ask for confirmation in writing. I have learnt that unless something is in writing what is sometimes said over the phone is not always the correct information.

     

     

    UK Pensions

     

    This is a very complex area and specialist advice should be sought to ensure that you fully understand the advantages, disadvantages and implications of transferring your UK Pension monies to Australia.

     

    Most Pensions can be transferred over to an Australian Superannuation scheme, however this scheme must be recognised by the UK, it is known as a QROPS scheme, there are quite a few schemes in Australia that have this status.

     

    There are many advantages to having retirement monies in Australia and the system here is much more flexible and sophisticated than in the UK but there may be reasons that it is not in a persons interest to transfer their fund.

     

    As someone has mentioned there is a 5 year ruling that applies which is that any transferred monies are still under obligation to the UK (HMRC) for a period of five full tax years of being a non UK resident. Any unauthorised payments within this time will attract serious penalties.

     

    Some believe this means that if you are of retirement age and have transferred a Pension you cannot access that money for 5 years, this is not actually the case there are ways that monies can still be accessed within this time period but they have to be within prescribed amounts stated by the UK rulings.

     

    A lot also will depend on the visa type a person holds ie temporary or permanent and the type of Pension scheme it is ie Final Salary or Market Linked.

     

    I strongly recommend that you seek advice from an Adviser that has knowledge and experience in UK Pensions and Australian Superannuation to be sure you are receiving the best advice.

     

    I run free seminars here in Adelaide for PIA members every 3-4 months on this topic, keep your eye out on the money & finance section for dates. :)

     

    regards

     

     

    Andy

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    Also...not everyone is aware of this...but life insurance can be paid from your super contributions.

     

    I kept our life insurance going in the Uk, only to find out that we also had cover within our super. I cancelled our policies in the uk and kept going with the super one over here.

     

    Also, I agree get it in writing if you plan to keep your life insurance going in the UK. We had a few policies, and some told us they were valid whilst over here, but i do remember one saying it was only valid for 5 years...or something like that anyway...(this was a long time ago for us, cant remember exactly!)

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    Guest Chelseadownunder

    We are with Norwich Union for our Life Insurance and they have been fine. We pay the premiums from our UK account. As far as Pensions, these will stay invested if they are money Purchase/ Personal Pensions / Stakeholder Pensions or be revalued each year (Final Salary).

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    Guest Lord Sistova

    :err:

    Hi Subjects:

     

    Pensions

     

    Does anyone know if you can contribute to a UK pensionscheme from A UK bank account,even if that pension scheme has been frozen for a number of years?

     

    NI contributions

     

    I heard from somewhere a few years ago that if you are no longer a UK citizen and dont plan on returning to the country you can claim some of your contributions whilst a tax payer when working in the UK.Some of us would have been working for many years over there and made compulsory contributions which in retirement we are not going to take advantage of ie,the health service etc.Can we claim on those contributions?

     

    Must go,ones got to fill the Aston up.

     

    Toodle Pip

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    :err:

    Hi Subjects:

     

    Pensions

     

    Does anyone know if you can contribute to a UK pensionscheme from A UK bank account,even if that pension scheme has been frozen for a number of years?

     

     

    NI contributions

     

    I heard from somewhere a few years ago that if you are no longer a UK citizen and dont plan on returning to the country you can claim some of your contributions whilst a tax payer when working in the UK.Some of us would have been working for many years over there and made compulsory contributions which in retirement we are not going to take advantage of ie,the health service etc.Can we claim on those contributions?

     

    Must go,ones got to fill the Aston up.

     

    Toodle Pip

     

     

    Hi

     

    You should contact your pension company and ask them whether they will allow contributions, should be possible.

     

    However you may want to consider a pension transfer to Australia (you should seek financial advice in this matter).

     

    Andy

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    Hi,

     

    I am soon to be moving to Adelaide, and am currently trying to tie my financial loose ends.

     

    This may seem like a daft question, but if I continue my UK Life Insurance policy (I am yet to confirm with Norwich Union whether this is actually possible) and pay the monthly fee from my existing British bank account; will I pay money transfer fees every month to put the required money in the UK account to pay the DD, or do you put enough money in the account to cover a year's worth of payments and pay a one-off transfer fee?

     

    Many Thanks,

     

    Labek

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    Hi,

     

    I am soon to be moving to Adelaide, and am currently trying to tie my financial loose ends.

     

    This may seem like a daft question, but if I continue my UK Life Insurance policy (I am yet to confirm with Norwich Union whether this is actually possible) and pay the monthly fee from my existing British bank account; will I pay money transfer fees every month to put the required money in the UK account to pay the DD, or do you put enough money in the account to cover a year's worth of payments and pay a one-off transfer fee?

     

    Many Thanks,

     

    Labek

     

    I would put a full years worth in, as there are usually fees for each transaction, we cannot predict the exchange rate fluctuations and you will always kick yourself that you should either had done it earlier! or you should have waited!

     

    But is the life insurance taken out in the UK valid if your living in Aus? or is it an endowment type policy?

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    Yes I too would be inclined to leave a couple of years' worth of premiums in a UK Bank Account.

     

    Keith makes a good point about validity, make sure you confirm with your insurance company.

     

    See also this thread: http://www.pomsinoz.com/forum/money-finance/211354-life-critical-illness-insurance-uk-will-policies-valid-australia.html

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    Thanks for your responses guys.

     

    Like I said; I have yet to contact Norwich Union and check, but I am leaning towards simple cancelling the policy as I don't think it will be worth continuing as for what I am covered for may not actually be compatible with what I need in Aus. It is a Critical Illness policy, but If I need to amend my cover it must surely make sense to simply start afresh with an Australian policy?

     

    I will be leaving a UK bank account open anyway, so leaving a lump sum in there for emergencies and paying UK expenses does seem an obvious answer.

     

    Thanks everyone,

     

    Labek

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