Australia has imposed a harsh new cap for lifetime contributions to pensions, dramatically restricting the amounts the British savers will be able to take with them if they emigrate Down Under.
Last week the Australian government installed a limit of $500,000 (£254,000) on non-concessional contributions, sometimes known as ‘after tax’ contributions, that can be made to Australian pension accounts.
The cap is roughly a quarter of the current UK lifetime allowance of £1m, and will be calculated retrospectively back to July 1 2007.
Under previous rules, Britons moving to Australia simply had to comply with an annual cap of $180,000 (£91,500).
The new contribution cap took effect from 3 May 2016, immediately following the Australian Budget announcement.
AJ Bell technical resources manager Gareth James says the move means many savers will be forced to leave cash in UK pensions and bank accounts.
Montfort International managing director Geraint Davies says the changes will significantly increase the difficulty of advising UK savers on how to migrate their pensions to Australia.
He says: “This has just become immensely complicated. Anybody who thinks they can just fill out a form and send their money across needs their head examined.
“Hopefully it will result in better advice for people who want to move them as people see how complicated it is an seek out a specialist adviser, because many UK firms are just not equipped to give advice in this area.”
Davies says prospects of reform aimed at overseas money may also be limited.
He says: “Some people have called for a carve out for overseas transfers, but I would be most surprised if that happened.”