Complete Guide to UK Pension for Expats Living in Australia
Over 1.2 million British expats now call Australia home. Some of them don’t even know that they still have right over their UK state pension & can claim it from Australia. And the ones who are aware, are confused over the process and regulations.
What is the amount of UK pension for expats? Is there a way to claim it from Australia? Is it taxed? Will it increase over time? These questions discourage the expats to give it a go.
If you’re one of them, this guide is for you. Because we won’t let you give up your rightful earnings. British Pensions has helped over 4,000 individuals, British, Australian & other nationalities and can help you too.
We’ll explain everything you need to know about the UK state pension in Australia. From eligibility, contribution options, & tax rules, to how to make the most of what you’re owed.
Let’s simplify the process and help you secure the financial future you deserve.
What Is the UK Pension?
The UK pension refers to retirement income provided by the UK government to individuals who have made National Insurance (NI) contributions during their working life. It comes in two main types:
- Basic State Pension: For individuals who reached retirement age before 6 April 2016. It’s based on your NI record and requires a minimum of 30 qualifying years for the full amount.
- New State Pension: For those reaching retirement age on or after 6 April 2016. You need at least 10 qualifying years to receive any pension and 35 years to receive the full amount.
The maximum amount for the new state pension is around £221.20 per week (as of 2025). But it can vary depending on your NI record. Keep in mind, private pensions or workplace pensions are separate and not covered under the state pension system.
UK Pension for Expats: Who Is Eligible?
Expats living outside UK can still receive their United Kingdom state pension. But they must meet the eligibility criteria:
- Have UK earnings that qualify for UK income tax for respective tax year.
- Be at or above the UK State Pension age (currently 66 for men and women, rising to 67 by 2028).
- Have at least 10 years of qualifying contributions in your national insurance record
- Be able to prove their current identity and residency.
To meet the 3rd eligibility criteria, you’ll have to provide proper details of your time spent in your resident country e.g. Australia. So, be prepared before claiming and provide all supporting documents with the help of qualified pension experts.
It’s important to note that residency in Australia does not disqualify you from receiving your pension. However, it does affect the amount you’ll receive, which we’ll cover below.
Can You Claim Your UK State Pension in Australia?
Absolutely. You can claim your UK state pension in Australia once you reach retirement age. All you have to do is:
- Apply through the International Pension Centre (IPC).
- Provide proof of identity and residency.
- Share your Australian tax details (for double taxation purposes we’ll explain below).
You can request your pension to be paid directly into your Australian bank account in AUD or to a UK account. However, there’s a catch involved in process.
Frozen British Pension in Australia
If you claim your UK pension in Australia, it will be frozen at the rate it was first paid.
Normally, the UK pension amount increase with time to compensate for ongoing inflation. But this rule is only applicable in countries having an uprating agreement with the UK. Unfortunately, Australia does not have this agreement. Means no annual increases to your pension unless you move to a qualifying country.
It is one of the biggest concerns for British expats planning long-term retirement in Australia.
Eligibility Criteria for Receiving UK State Pension in Australia
The rules are pretty much same as for other expats, but let’s revise. In summary, you’re eligible to receive your UK pension in Australia if:
- You’ve reached the legal UK pension age.
- You have a minimum of 10 years of NI contributions.
- You’ve applied through the International Pension Centre.
- You’ve provided proof of Australian residency.
Then, your pension will keep adding to your provided account. You can spend it or save for future, as per your wish.
How to Transfer UK Pension for Expats to Australia?
As far as UK state pension is concerned, you can claim it from Australia but transfer it to Australian system. It stays in the UK system and is paid directly to you wherever you live.
However, for private or workplace pension, you can transfer British pension to Australia.
It is done through a Qualifying Recognised Overseas Pension Scheme (QROPS). A QROPS allows eligible individuals to transfer British pensions to Australia under certain conditions. It is a good system with tax advantages and simplified access.
Be cautious, only a few Australian funds currently qualify as QROPS due to strict UK rules. Always consult a qualified financial adviser before starting a transfer.
Channels for Transferring UK Pension to Australia
If you’re looking to transfer UK pensions to Australia, gear up. The process is simpler and fast if you follow the right steps & don’t make mistakes.
The process follows this pathway:
- Contact your UK pension provider to check transfer eligibility.
- Identify a QROPS-compliant Australian fund.
- Work with a UK-Australia financial advisor to handle paperwork and compliance.
- Complete transfer forms and undergo identity verification.
Keep in mind that UK state pensions cannot be transferred, only private or company pensions.
How Much Can You Transfer?
If you’re transferring a UK private or workplace pension to Australia via a super fund (like QROPS), the amount you can contribute is subject to Australian caps (maximum transfer limits without additional tax).
- The non-concessional contributions cap is currently $110,000 AUD per year.
- Or, you can bring forward up to $330,000 AUD over three years (subject to age and total super balance).
Exceeding these limits can trigger extra taxes, so it’s important to plan with a tax advisor.
Reminder: These caps don’t apply to UK state pensions, since they are not eligible for transfer and are paid directly to your bank account.
Tax Implications of UK Pension in Australia
The UK state pension is taxable income in Australia. So, yes, there will be tax implications on it as follows:
- The tax amount will be decided by Australian Taxation Office (ATO) based on your pension amount & other relevant details.
- You must declare it in your Australian tax return each financial year.
Then, it will be added to your total assessable income in Australia and taxed according to the following 2024–25 individual tax rates (for residents):
Taxable Income (AUD) | Tax Rate |
$0 – $18,200 | Nil |
$18,201 – $45,000 | 19% |
$45,001 – $120,000 | 32.5% |
$120,001 – $180,000 | 37% |
$180,001 and over | 45% |
So, if you don’t withdraw, it could bump you into a higher tax bracket. Something to be mindful of when budgeting for retirement.
Will the UK Still Tax My Pension in Australia?
Generally, no, you won’t face any further tax implications.
Since there’s a double taxation agreement between the UK and Australia. According to that, if you’ve paid tax on an amount in Australia, it won’t be subjected to further tax by UK government. Given that you’re a resident of Australia.
But if you don’t register with the UK HMRC using the right DTA forms, UK taxes might still be deducted. Get professional tax advice to get set up correctly and avoid double taxation & unnecessary deductions.
How to Maximise Your UK Pension in Australia
To make the most of your UK pension Australia as an expat, consider the following tips:
1. Use QROPS
If you have private pensions, consider transferring them to Australia via QROPS.
2. Plan for the Freeze
Since there is no yearly rise for English pension in Australia, make the budget for inflation.
3. Get Tax Advice
Understand how your pension affects your Australian income tax to reduce deductions.
4. Check for Australian Age Pension
Depending on your income and residency, you can also qualify for Australia’s age pension, and get extra support.
5. Fill NI Gaps
Voluntarily contribute to complete the 35 years needed for the full pension. Yes, you can do that even from Australia (or any country). Let’s find out how to do that.
Can You Contribute to the UK Pension While Living Abroad?
Yes, you can. British expats can continue making voluntary National Insurance contributions to build up or boost their UK pension. It is particularly useful if you have gaps in your NI record and you’re not currently eligible for pension.
There are two types of voluntary contributions you can make in UK pension for expats:
Class 2 NI | For those who’ve worked in the UK and now work abroad (cheaper). |
Class 3 NI | For those not working but want to increase pension entitlements. |
Making voluntary contributions is a smart strategy for many UK expats in Australia. But you’ll need guidance from pension experts for the process.
UK Pension is Your Right: Access It in Australia with British Pensions
If you’re unsure where to begin, British Pensions can help you.
Our team understands the unique needs of UK expats in Perth and across Australia. So, we can take care of everything. Like eligibility assessments, paperwork, direct submissions to UK authorities, and secure payment transfers to your Australian bank account.
With a 95% assessment accuracy rate, we make the process smooth, transparent, and stress-free. Over 4,000 expats and retirees got their back pay, monthly payments, and lump sums till now. You can be the next.
