Expat with scattered savings and retirement funds - how do I organise them?
July 16, 2009 7:36 AM   Subscribe

Expat needing to organise and manage money across two (or more) countries. How best to save in multiple places, and organise superannuation/retirement accounts?

I recently moved to the UK, and I am self-employed here. For the first time, I have to take care of insurance, tax, and expenses instead of my employer organising this. I am putting aside money for tax every month. I have savings accounts both in the UK and Australia with various amounts in them. I am not sure how long I will stay in the UK (probably no more than a few years) and will either go home or to another country. I really need to get my money together and work out what to do with it.

I have two Superannuation accounts that refuse to roll together in Australia (both public sector). I have not signed up for a retirement fund in the UK. The most pressing issue right now is whether I let my most recent super account switch from Defined Benefit to Accumulation. I don't necessarily plan to go back to the same sector, so would accumulation be wise?

Should I open a retirement account here in the UK, even if I only plan to stay for a few years (I am paying NI contributions)? Or should I do something else with the money I would have otherwise saved? For example I have an Etrade account for share purchasing that I opened and never used.

Are there any savings accounts that work well for expats in multicurrency? I know about HSBC Premier but I do not have enough money to go with them.

I am concerned that I have pools of money all over the place, and I am not getting the best out of them. I would like to work these things out for myself if I can, if you are an expat how do you manage your money and savings?
posted by wingless_angel to Work & Money (7 answers total) 3 users marked this as a favorite
Best answer: "Should I open a retirement account here in the UK, even if I only plan to stay for a few years (I am paying NI contributions)? Or should I do something else with the money I would have otherwise saved?"

I can't help you some of the Oz specific queries (superannuation), but as an American who has been living here in the UK for almost thirteen years, I've never signed up for a retirement account as they force you to annuitise your principal.

That's right, you can't take it all as lump sum, instead having to purchase an annuity and, as a active investor, I (personally) consider this a total scam.

You see currently a mail aged 60 retiring in the UK will receive approximately £612 per annum for every £10K in their pension pot.

That's best case; other providers will yield less.

Not from my personal situation every job I've held here in the UK required me to contribute in order to realise the employer match. While I don't like leaving money on the table, I can do better with my money than what annuity rates dictate.

Insurance companies rarely go out of business, and looking at that cash flow over the expected horizon, I know that someone is making money and it ain't me.

Keep in mind this would be a Sterling denominated cash flow. I have no idea (and neither does anyone else) what shape Sterling will be in in say a decades time, and this is especially relevant to myself as I may not be living here - we keep a second flat in Amsterdam, and its far, far cheaper than London.

"I am concerned that I have pools of money all over the place, and I am not getting the best out of them. "

Yes. I've got financial assets back in the United States, cash in the UK and cash in the Eurozone, but until we decide on a long term residence, its imprudent to have the money tag along whenever we change countries of residence.

I'd suggest focusing to insure that you're getting the best possible return from each asset pool, where ever it is, and just enjoy the lower volatility and increased returns that diversification gives you.

Just my thoughts on one of your points. Hope this helps!
posted by Mutant at 8:16 AM on July 16, 2009

Best answer: Just to clarify. You have paid contributions into two separate superannuation funds in Australia and both your accounts were created via employment with the public service, is that right? It would be helpful to know the split - ie, is there a federal government/state government split, two states, federal/local government. Which state/s? Also, is your preservation age 55?

Ideally, you should continue paying into some kind of super fund while you're in the UK. Are you able to withdraw your NI contributions when you leave the UK?

Whether you should opt for defined benefit or accumulation depends entirely on your personal financial circumstances. Will you need to rely on your superannuation income streams within the next 10 years? If so, would your most recent super fund be providing your major source of income in retirement?
posted by Lolie at 8:41 AM on July 16, 2009

Response by poster: Lolie: yes, one account for each job I had there. Both federal, but one was education and both of my rollover applications were rejected (I assume I had the wrong type of accumulation component). NSW. Preservation age is 60.

I am a UK citizen. This should give me a (tiny) UK pension from NI contributions when I hit 65.

I am 30 now. Thinking of having a child and returning to workforce within the next few years. Don't plan to retire until 65 unless I have health problems. At this stage, neither of my super funds would be my major source of retirement income.
posted by wingless_angel at 9:01 AM on July 16, 2009

I'd go with accumulation. It's impossible to predict what rules will apply by the time you reach preservation age, but over the long term our super funds have very good returns. Because you're so young, all your eggs won't be in one basket - your Australian super will only be a small part of your ultimate retirement portfolio. And none of the government superannuation schemes can actually go broke, so you can't lose that money altogether.

There's probably a simpler way to arrange your various superannuation affairs. I'll have a hunt around and see what I can find out about where portability is heading.
posted by Lolie at 9:29 AM on July 16, 2009

Response by poster: Thank you Lolie! That's reassuring.

Mutant: thanks very much for your thoughts. That does sound like a good approach. Now to make the most of diversification :)
posted by wingless_angel at 9:51 AM on July 16, 2009

@Mutant: the rules have changed, it's now possible to take income directly from a UK pension (within limits).

Unsecured pensions
posted by emilyw at 11:52 AM on July 16, 2009

I'm in the same position, due to various moves we have money & investments in 4 different countries. Until we figure out where we will finally settle, we've taken mutant's approach and are trying to maximize them in their respective countries.
posted by arcticseal at 8:22 PM on July 17, 2009

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