Retiring in Australia with a UK Pension: 7 Steps You Must Know

Moving to Australia with a UK pension raises big questions. Will your State Pension rise with inflation? How will it be taxed? Can you transfer your UK pension to Australia? And can you still claim it while living overseas?

This UK State Pension guide for expats answers all of these, including the latest updates on NI top-ups and pension reviews. We’ll explain exactly how your UK pension works Down Under, step by step. Keep reading to learn how to plan your retirement income in Australia, avoid costly surprises, and make the most of your British pension abroad.

What Happens to Your UK State Pension If You Move to Australia?

When you live in Australia, your UK State Pension is frozen at the rate you first receive it. Only those living in the UK, EU/EEA, Switzerland or specific agreement countries (not including Australia) get annual “triple-lock” uprating. Practically, this means your pension will not increase each year with inflation.

For example, suppose you moved to Australia in 2016 with a new State Pension of £155.65/week (the full rate in 2016). By 2025 the full-rate UK pension is £230.25/week. In the UK your pension would have grown to £230.25, but in Australia it remains £155.65. Over a 10-year period, that’s roughly a £75/week gap.

In short: Australia is a “frozen pension” country, so budget knowing your UK pension won’t keep up with inflation unless you return to a country on the uprating list.

Read more on ‘Why UK Pensions in Australia Are Frozen?’ and explore what you can do about it.

7 Key Steps for Retiring in Australia with a UK Pension

1. Confirm your UK pension eligibility

First, check if you qualify for a UK State Pension and roughly how much. You need at least 10 qualifying years of UK National Insurance contributions to get any pension (and 35 for the full “new” State Pension).

Even 10–34 years yields a proportion of the full rate. For example, 20/35 of the full rate (£230.25) is about £132/week. Your pension forecast will show a starting amount based on your record. This becomes your fixed rate in Australia.

Are You Eligible for UK Pension in Australia? Read this guide on New Rules 2025

2. Consider voluntary NI top-ups

Missing years can be “bought back” with Class 3 contributions, but the rules changed in 2025.

From 6 April 2025, you can usually only purchase the last six tax years. The special one-off window to fill gaps going back to 2006–2016 closed on 5 April 2025 and is no longer available.

Each full qualifying year of National Insurance adds about 1/35th of the full new State Pension (currently around £221.20 per week in 2025/26). That means one year can boost your pension by roughly £6.30 a week (≈£327 a year).

Since a Class 3 year now costs about £900 (2025 rate), the “payback period” is usually less than three years, making top-ups great value if you expect to draw your pension for a reasonable time.

3. Prepare to claim from Australia

You will normally be sent a claim pack about 4 months before your State Pension age. If not, contact the UK’s International Pension Centre (IPC) as soon as you can.

To claim, use the IPC forms (BR1 for old-SP or BR1 NSP for new-SP) or call the IPC directly. You’ll need:

• proof of ID (passport or birth cert)
• marriage/civil partnership papers (if applicable)
• your NI number
• evidence of past UK work (payslips/P60s/HMRC records)

Also prepare your Australian bank IBAN/SWIFT for payments. Allow plenty of time: IPC claims often take 2–3 months or more to process.

Read a complete guide on Claiming Your UK Pension From Australia

4. Set up payment logistics

UK pensions can be paid directly into Australian bank accounts via the “Inbound Payment Confirmation” IPC’s International Payment service. Give the IPC your Aussie IBAN/BIC, and they’ll send payments (in GBP) via SWIFT.

Fees vary: most Aussie banks charge an “inbound transfer” fee (e.g. ANZ up to A$15, CBA up to A$11, Westpac A$12). On top of that, watch currency conversion costs.

Example: £200/week ≈ A$370 (at 1.85). After a 2–3% bank FX margin (~A$8) plus a A$12 fee, you’d net A$350/week (losing A$20). To reduce losses, consider a multicurrency account or specialist FX providers (Wise, CurrencyFair, etc.) which often offer better rates and low flat fees.

What to do next: Check your bank’s fees and set up an account with known SWIFT details (or use a currency service) before your first payment arrives.

5. Understand Australian tax

Australian tax law treats most foreign pensions (including the UK State Pension) as taxable income. If you’re an Australian tax resident, you must declare your UK pension on your tax return. You’ll pay it at your marginal rates, but you may claim a foreign tax credit for any UK tax withheld (though the UK withholds 0% on state pensions due to the UK–Aus tax treaty).

Wondering ‘Will I pay tax in Australia on my UK pension?’

Yes. The ATO treats it as foreign income. The UK–Australia double tax treaty means UK pensions aren’t taxed twice. You can claim any UK tax back, so effectively you pay only Australian tax.

6. Pension Transfers: can you move your UK pension to Australia?

Yes, you can transfer your UK private pension to an Australian superannuation fund, but you must meet eligibility criteria, including:

• You’re at least 55 years old (rising to 57 from 2028), and
• The receiving Australian fund is registered as a Qualifying Recognised Overseas Pension Scheme (QROPS) with HMRC.

State pensions cannot be transferred, and you may face a 25% overseas transfer charge unless you meet specific criteria for an exemption. 

If you have significant private pensions, talk to us before moving any funds. We offer a transfer suitability review to check your options.

Read more about Transferring your UK pension to Australia

7. If your pension is already frozen

If you’re already receiving a frozen pension in Australia, focus on maximising your total retirement income. Consider tighter budgeting or boosting Australian savings/super over time. Check if you’re eligible for any UK benefits (like Pension Credit) or if you have any claimable back-pay (e.g. missed years – though these are rare).

Stay informed: British Pensions in Australia (BPiA) and other groups campaign for fair indexation, but meaningful change could take years. Meanwhile, plan contingencies: additional part-time work, voluntary contributions to Australian super, or local senior benefits.

Read more on British Pension Guidelines for Expatriates

Ready for Australian Retirement? British Pensions Can Help

If you’re struggling with the paperwork or complexity, you’re not alone.

Many expats in Perth and beyond choose British Pensions for expert help. We’ve guided over 4,000 Australians in claiming their UK pensions.

We know the Australian-UK system inside out. We’ll assess your eligibility, double-check your NI record, complete forms (or call IPC for you), and liaise with HMRC/DWP until your pension is flowing. Our team also advises on top-ups, tax, and everything in between.

So, don’t navigate this journey alone.

Consult our pension experts to get a clear, friendly plan and expert support from British Pensions.

FAQs

1. Will my UK State Pension increase if I live in Australia?

No. Your pension is frozen at the rate first paid and won’t rise with UK inflation. In the UK, EEA or Switzerland it would increase each year, but not in Australia.

2. Can I get my UK pension in Australia, how do I claim it?

Yes. If you qualify, you can claim your UK State Pension from Australia. To apply, contact the International Pension Centre (IPC) with your National Insurance number and complete form IPC BR1 from GOV.UK to have payments made directly to your Australian bank account. You must have at least 10 qualifying years of NI contributions to be eligible.

3. Can I transfer my UK State Pension to Australia?

Yes, it is possible to transfer a UK pension to an Australian superannuation fund, but only under strict conditions. You must be aged 55 or over, and the Australian super fund must be approved as a Qualifying Recognised Overseas Pension Scheme (QROPS) with HM Revenue & Customs (HMRC) in the UK. Without meeting these criteria, a transfer cannot go ahead.

4. What are Class 3 NI top-ups and how does the April 2025 change affect me?

Class 3 NI contributions let you fill gaps in your National Insurance record to increase your UK State Pension. From 5 April 2025, you can usually only buy back the last six tax years. The special extended window (which allowed top-ups for gaps going back to 2006) has now closed. If you didn’t secure a callback or payment before the deadline, you can no longer access older years.

5. How long does claiming UK pension take from Australia?

Expect 3–4 months after submitting forms, though delays are common. Apply early and follow up with the IPC if you hear nothing after 8 weeks.

6. Should I transfer private pensions to Australia?

Possibly. Transfers to superannuation (QROPS) may be tax-efficient but are complex, with strict rules and possible 25% UK tax charges. Always seek cross-border financial advice first.