People planning to live full-time in Australia could reap significant pension benefits due to a law that enables them to keep practically all their retirement savings as a lump sum.

The country is a leading destination for retirement due to cheap housing and plentiful beaches, while differences in the tax systems mean that those within ten to 15 years of retirement could see significant gains, reports the Guardian.

Australia uses a system called QROPS (Qualifying Recognised Overseas Pension Scheme) that allows full-time residents to avoid compulsory annuities which are often seen as “poor value”.

Geraint Davies, from migration specialists IFA Montfort International, commented on the difference between the UK and Australian system: “Tax relief does not happen on the way in or on investment growth. The advantage is the Australian tax authorities are not concerned with what happens to the fund when you reach retirement age. You can keep it intact if you wish.”

This is possible for those who have a visa which shows the intention of a permanent move to the country and money must have been in a QROPS for five years before taken as a lump sum, the report continues.

The IFA Montford is a UK-based body providing consumers with information on different types of borrowing and investment which may be available to them.

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