Oz is great when it's time to retire and draw your pension...with it's 'tax free' superannuation position on your pension...
But in the UK, when you draw your pension, its regarded as income... so it's taxed again!
So, in effect, you are paying income tax twice! Unless you used 'SMART' (save more and reduce tax) to offset taxable income at source...
In my case the pension is taxed like income. It is an old scheme where you put a % of your salary in after tax and earn a benefit multiplier that is used towards a % of your final salary for your pension. So it was paid in after tax and then taxed again but generally it works out better than the standard superannuation and did for me, however the worst part of it is your spouse at your death only gets 67% and no-one else gets any so you want to live a reasonable time frame to make it work.
The standard super in Australia is taxed at 15% on the way in and tax free on the way out after 60 if you claim your pension the right way. As long as you were sensible and contributed enough you can get a good tax free pension and any remaining capital stays with your estate. If you do get over the $1.6M limit then you can put that in a separate account and pay 15% tax on any earnings it makes. As you say the 'tax free' position is great which is why I have talked to younger people saying the scheme is not what I have but still very good and you should be planning for your retirement even if it is decades away. Your older self will thank you when the time comes.
