Retirement in Australia and New Zealand

For many retirees, the thought of spending your twilight years Down Under is something that is just too good to resist.

Retiring to Australia

In order to retire to Australia, you must initially apply for a visa. If you have family ties to Australia, you could potentially apply for a Parent Visa, Age Dependent Resident Visa, Remaining Relative Visa, or a Carer Relative Visa. If you are not eligible for any of these, you will have to apply for an Investor Retirement Visa.

The Investor Retirement Visa is the most expensive way to ensure you can retire in Australia. You will generally have to show the authorities that you have AUD$500,000 if you plan on settling in a rural area and AUD$750,000 if you are settling anywhere else. The two-part application fee is in excess of AUD$11,000, while you will also need to prove that you have an annual income of AUD$50,000 in rural areas and AUD$75,000 elsewhere.

The Investor Retirement Visa does not lead to permanent residency in Australia. You can apply for further temporary visas and should do so before each visa expires. There is no maximum on the number of years you can stay in the country.

The Investor Retirement Visa should also entitle you to receive a Seniors Card, which provides all sorts of benefits got those aged 60-plus, including considerable discounts on travelling expenses, recreational and eating out, among many other benefits.

Retiring to New Zealand

The immigration process in New Zealand can be very long and protracted; you will have to live five years in the country before being granted residency. However, it is worth noting that British citizens and other British passport holders who produce evidence of the right to reside permanently in the UK can visit for up to six months without a visa.

If you want to retire to New Zealand there are two possible ways to get a visa: if you have a child who is resident there you could apply for a visa under the parent category; or you could apply as an investor. The temporary retirement category for investors offers a two-year visa to anyone aged over 66 who is willing to invest NZ$750,000 in New Zealand for two years and has NZ$500,000 in funds to live on and an income of at least NZ$60,000 a year.

Anyone applying for a visa under the parent category will be prioritised if they have a sponsor who earns at least $65,000 a year, their own guaranteed income of $27,203 a year or at least NZ$500,000 in funds to move to the country. Otherwise they need a sponsor who earns at least $33,675 a year. Anyone applying for an investment visa must have travel and/or health insurance.

Living expenses

New Zealand and Australia are among the most expensive developed countries to live in. While the cost of petrol in Australia and New Zealand is generally cheaper than in Britain, in just about every other field – hotels, car hire, restaurant food, wine, clothes, and so forth – prices are higher Down Under.

Financing your retirement

You should consider a number of key areas relating to retirement finances when you are moving to Australia or New Zealand, such as checking to see what impact such a move might have on the benefits and pensions that you are entitled to receive in the UK.

When thinking of retiring to Australia or New Zealand, you should seek independent advice when it comes to your private pension and UK state pension. In an ideal world, this would happen before arrival in either country.

It is also very important that you inform the Department for Work and Pensions of your move overseas and provide them with your new contact details.

Currency exchange

It is crucial to take the sterling-Aus/NZ dollar exchange rate into consideration, and what impact any major changes between the two currencies may have on your lifestyle in either Australia or New Zealand. See the section Currency exchange to Australia and New Zealand for more details.

Your pension

Aside from a private pension, you may be able to claim a UK state pension while residing in Australia or New Zealand – check with the International Pension Centre (IPC) to see if you qualify.

You should be sent a claim form four months before you hit the milestone if you have not yet reached your state pension age. Contact the IPC if you have not received a letter three months before you reach state pension age.

Life certificate

The Department for Work and Pensions may send you a ‘life certificate’ to see if you are suitable to receive a state pension. If you do receive a life certificate, ensure that you get it signed by a witness and send it back. Your payments may be stopped if you don’t abide by the rules set out in the form.

Frozen state pension

Unfortunately, a major disadvantage to your chosen retiring to Australia or New Zealand is that unlike pensioners who retire within the European Economic Area (EEA) and some other countries with special agreements, you will not be entitled to the yearly index-linked increases on your pension.

There are well over 550,000 ‘frozen’ pensioners around the world, almost half of whom live in Australia. Some of the very oldest, who qualified for their state pensions in the 1970s, have had their pay outs frozen at as little as £6 a week. Yet they would be getting more than £100 a week if they were living in Florida or on the Algarve.

Receiving your pension

You can request that your state pension be paid into an Australian or New Zealand bank account (depending which you reside in) or a UK bank or building society. However, you cannot choose to have it paid in to both countries – even if you spend part of the year in the UK and the other part in Australia or New Zealand.

The bank/building society account must either be in your name or a joint account. You can also use somebody else’s account, subject to their approval.

The money could either be paid every four weeks or every 13 weeks. If you elect to receive the money abroad, the amount of money you get will vary slightly due to changes in the exchange rate.

Pension levy

You will also have to pay tax on your pension whether to the UK or the Australian/New Zealand government (depending on which country you live/part-live in). If you spend part of your time in the UK and part in Australia/New Zealand you will be classed as a British citizen and taxed in the UK. If you live entirely in Australia/New Zealand you will be deemed a ‘UK non-resident’ and as there is a double taxation agreement with Australia/New Zealand you will only have to pay tax on your pension income under the Australian/New Zealand system.

Australian healthcare

The healthcare system in Australia is a complex mix of Commonwealth- and state government-funded services and services funded by private health insurance. Australia’s system of universal medical cover, called Medicare, is among the best. It was introduced in 1984.

All taxpayers contribute 2% of income to Medicare. Higher earners contribute slightly more. This falls very far short of the budget required. Most funding comes from central government. Most people are covered for 100% of in-patient care and roughly three-quarters of primary care charges. Most buy ‘top-up’ insurance to cover the shortfall.

Compared with health systems in other developed countries, the Australian health system generally delivers above-average health outcomes, which explains why many people want to take advantage of the system. However, some age restrictions apply to those seeking to join it.

You also need to be aware of emergency procedures; who to call in an emergency and which hospitals that will be the most suitable for your needs in the event of an emergency. ‘Triple Zero’ (000) is the primary national emergency number in Australia.

New Zealand healthcare

New Zealand offers an efficient healthcare system partly public and partly private funded. There is strong uptake of private health insurance (as in Australia), partially triggered by long waits for state hospital treatment.

Also New Zealand justifiably operates a severely restrictive immigration policy. Like most developed nations, it does not want its care system even more overloaded. Waits for surgery can exceed a year.

Those seeking permanent residence in New Zealand must be in good health before they are accepted into the system. Simply buying medical insurance is not enough.

But note that there is a UK-NZ Reciprocal health cover. Just as a New Zealander in Britain is entitled to free NHS treatment in an emergency, so the same applies to Britons in New Zealand. But this provision is likely to be insufficient. Expats seeking to join the health system will find it very tough, unless they have a work permit in excess of two years. Any less, and new arrivals are told to get private health insurance.

111 is the emergency telephone number in New Zealand.

 

Banking in Australia and New Zealand

 

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