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The Impact of Rising Interest Rates on Your UK Pension Transfer

Following several years of the RBA keeping Australia’s Cash Rate Target below 1.00%, 4 May 2022 saw an increase of 0.25% – the first interest rate rise this year. While the immediate reaction to this tends to focus on the property market and how it will impact home loans, less is covered regarding the impact on the bond market and in turn how UK Pension Transfers can be affected by rising interest rates. With one increase already in Australia, and another likely to occur later in the year, there is renewed urgency for UK expats to consider the impact on their pension transfer value and whether now is an opportune time to transfer their pension to Australia. So, what’s the urgency, why should UK expats transfer their private pensions, and how does it all work? Read on to find out…

Why Transfer Your UK Pension Now?

Transferring your UK pension to Australia can form a significant component of your retirement planning strategy and give you access to additional income in retirement. The record high transfer values we have seen over the past few years have come about as a result of record low interest rates, so UK expats living in Australia have been able to use the prevailing economic climate to their advantage. Now that interest rates are on the rise again, the likelihood is that transfer values will be negatively impacted. What’s more, further interest rate rises will compound this, hence time is a factor if you are thinking about transferring your UK pension to Australia. The longer you leave it, the higher the chance that you will have less money to transfer.

What are the Benefits of Transferring Your UK Pension?

The upsides to transferring your UK Pension to Australia are many and varied, but there are a few highlights worth considering. One key benefit is tax efficiency – any income or lump sum you derive from the UK once you retire is taxable. However, if you transfer the funds to Australia the income you draw in retirement is exempt from tax – leaving more in your pocket to enjoy!

Another benefit of transferring is to safeguard against legislative changes. The UK and Australian governments have made significant changes over the years, impacting some expats’ eligibility to transfer whilst adding greater complexity and as a result time and effort to the transfer process. By taking action now, you can safeguard your hard-earned pension funds against future changes to legislation which may impact a transfer in the future (or make it altogether impossible).

What’s the Process?

At PTS, we have developed a simple three-step transfer process. This makes things easy for our clients, affords us the information we need to action the transfer, and ultimately produces the best outcomes.

Firstly, we start with a signed Letter of Authority form from yourself, following which the PTS team will contact you to qualify the eligibility of your transfer. If your transfer is deemed eligible, the second step involves is preparing a comprehensive UK Pension Report with detailed analysis as to whether or not transferring is beneficial for your circumstances and goals. Finally, if you decide to proceed, we will project-manage the entire transfer, ensuring a stress-free experience for you.

Next Steps

If you haven’t yet been in touch with us about transferring your private UK Pension to Australia, now is the time! Given the uncertainty around interest rates and the UK’s penchant for tricky legislative changes, delaying a UK pension transfer may result in an inability to transfer in the coming years. You can reach the PTS team on 08 9233 9269, or feel free to email us at

Find out more about the UK State Pension, and how we may be able to help you top up and claim, click here.

written by:

Will has 15 years industry experience working in both consultant and technical positions. Prior to becoming a qualified Financial Planner in Australia, Will worked as a pensions consultant in the UK gaining Advanced Diploma qualifications whilst working there. He has also attained an Advanced Diploma in Financial Planning and has completed the FASEA Financial Adviser Exam and Ethics qualification.

At McKinley Plowman, Will has progressed over the years from our UK Pensions Division all the way through to senior Financial Adviser and now Associate Director within the Wealth team – amassing invaluable experience and knowledge along the way.

Will is a keen cyclist and occasional triathlete that loves going out and socialising with friends.

Will is an Authorised Representative of Fortnum Private Wealth Ltd.

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