Austria living/UK citizen - Please help me save my future!

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Topic Author
nomadboglenoob
Posts: 30
Joined: Wed Aug 04, 2021 2:18 pm

Austria living/UK citizen - Please help me save my future!

Post by nomadboglenoob »

Hi all!

I'm a UK citizen, living and working in Austria. I've been here 5 years and am marrying a German this year :happy . I'm 34 and have put off sorting out my pensions and savings for too long!

The situation:
  • I'll likely stay in Austria for longer, but will probably eventually move elsewhere in Europe (likely) or back to the UK (less likely) in the future for work opportunities (though I do love it here!). The truth is, I don't know where me and my partner will end up in the short term or long term (pensioners).
  • I've got a couple of private work based pensions in the UK with little in them.
  • I've contributed to the UK National Savings (public pension) for 13 years, and will be due a massive £74GBP per week on retiring.
  • Work pays into an Austrian VBV private pension scheme, but I haven't been contributing more than they automatically take from my pay. I think it totals about €8k in there...
  • I've got about €60k euro in an Austrian savings account, and am owed £25k by my parents :moneybag .
  • I'm debt free.
  • Buying property here seems totally impractical in my situation
  • Brexit sucks
  • ...and I own some crappy meme stocks through IBKR and some cryptos totalling about €14k (I'm here to turn my life around, alright ;))

Given the Austrian public pension scheme doesn't seem to provide much support for people in my situation and I may not live here for long, I need to come up with a better plan. (btw I can't work out if it's 7 years contributing or 15 when you become eligible for the Austrian pension, and what you get for contributing)


I believe my best plan would be to :
  • Max out Austrian work pension plan with my work bonus at end of each year (up to the 10% of max) for as many more years as I stay here
  • Try to stay in Austria paying tax till I hit 7 years before I consider moving so that I qualify for a public pension... if that's real (???)
  • Start investing the cash over the top of my emergency fund. I've been looking at the Vanguard LifeStrategy 80 via Flatex, as a low effort solution. It seems I just need to be have cash in the Flatex account each year at the right point to pay the KESt owed.

Please rip ↑↑this↑↑ plan apart and suggest another one if you think there's a better angle?

I'd also like to know:
  • What would happen with the investment if I moved country - is there a scenario where I could transfer the fund without being double taxed on the 60% KESt I paid on accumulations.
  • If it would make more sense for me and my partner to invest in her name instead (German).
Topic Author
nomadboglenoob
Posts: 30
Joined: Wed Aug 04, 2021 2:18 pm

Re: Austria living/UK citizen - Please help me save my future!

Post by nomadboglenoob »

perhaps I've asked a little too much in this novel I've written... :?
halfnine
Posts: 2421
Joined: Tue Dec 21, 2010 12:48 pm

Re: Austria living/UK citizen - Please help me save my future!

Post by halfnine »

nomadboglenoob wrote: Wed Aug 04, 2021 2:53 pm ...Given the Austrian public pension scheme doesn't seem to provide much support for people in my situation and I may not live here for long, I need to come up with a better plan. (btw I can't work out if it's 7 years contributing or 15 when you become eligible for the Austrian pension, and what you get for contributing)...

...Try to stay in Austria paying tax till I hit 7 years before I consider moving so that I qualify for a public pension... if that's real (???)...
If you move to another EU country you likely don't need to stay in each country a "X" number of years to qualify for their state pension. Provided you spend enough time overall working in the EU generally you can get credit for years served and get a pro-rated amount from each country. More information here.
nomadboglenoob wrote: Wed Aug 04, 2021 2:53 pm ...I'm a UK citizen, living and working in Austria. I've been here 5 years and am marrying a German this year...
If you don't already have citizenship with an EU country I'd suggest staying long enough to get one in Austria before you move. I don't know anything about Austria's requirements but considering Brexit you might already be eligible but that could be time limited if it hasn't already expired.
Topic Author
nomadboglenoob
Posts: 30
Joined: Wed Aug 04, 2021 2:18 pm

Re: Austria living/UK citizen - Please help me save my future!

Post by nomadboglenoob »

halfnine wrote: Thu Aug 05, 2021 2:14 am
nomadboglenoob wrote: Wed Aug 04, 2021 2:53 pm ...Given the Austrian public pension scheme doesn't seem to provide much support for people in my situation and I may not live here for long, I need to come up with a better plan. (btw I can't work out if it's 7 years contributing or 15 when you become eligible for the Austrian pension, and what you get for contributing)...

...Try to stay in Austria paying tax till I hit 7 years before I consider moving so that I qualify for a public pension... if that's real (???)...
If you move to another EU country you likely don't need to stay in each country a "X" number of years to qualify for their state pension. Provided you spend enough time overall working in the EU generally you can get credit for years served and get a pro-rated amount from each country. More information here.
nomadboglenoob wrote: Wed Aug 04, 2021 2:53 pm ...I'm a UK citizen, living and working in Austria. I've been here 5 years and am marrying a German this year...
If you don't already have citizenship with an EU country I'd suggest staying long enough to get one in Austria before you move. I don't know anything about Austria's requirements but considering Brexit you might already be eligible but that could be time limited if it hasn't already expired.
Thank you! I will meet with the local government office in the next week to better understand the system :happy
Valuethinker
Posts: 49036
Joined: Fri May 11, 2007 11:07 am

Re: Austria living/UK citizen - Please help me save my future!

Post by Valuethinker »

nomadboglenoob wrote: Wed Aug 04, 2021 2:53 pm

I believe my best plan would be to :
  • Max out Austrian work pension plan with my work bonus at end of each year (up to the 10% of max) for as many more years as I stay here
  • Try to stay in Austria paying tax till I hit 7 years before I consider moving so that I qualify for a public pension... if that's real (???)
  • Start investing the cash over the top of my emergency fund. I've been looking at the Vanguard LifeStrategy 80 via Flatex, as a low effort solution. It seems I just need to be have cash in the Flatex account each year at the right point to pay the KESt owed.
Certainly maxxing pension sounds reasonable depending on how the pension works. Final Salary? Defined Benefit (Career Average Salary or FS)? Defined Contribution?

"Try to stay in Austria". What you want is an EU passport. That's probably easiest either from Austria or Germany? You have *got* to get an EU passport as the UK & EU are set to diverge further. This "honeymoon period" we are on, arguing over Northern Irish sausages, is just a precursor to the constant and interminable set of spats & divergences to come.

Please rip ↑↑this↑↑ plan apart and suggest another one if you think there's a better angle?

I'd also like to know:
  • What would happen with the investment if I moved country - is there a scenario where I could transfer the fund without being double taxed on the 60% KESt I paid on accumulations.
  • If it would make more sense for me and my partner to invest in her name instead (German).
I can't speak to the law or the tax position. But I would encourage you to have investments in your own name, particularly pre marriage.

Austria being Austria I imagine they have been slow to recognize civil partnerships & common law relationships? If they do so at all?
Topic Author
nomadboglenoob
Posts: 30
Joined: Wed Aug 04, 2021 2:18 pm

Re: Austria living/UK citizen - Please help me save my future!

Post by nomadboglenoob »

Valuethinker wrote: Thu Aug 05, 2021 3:54 am Certainly maxxing pension sounds reasonable depending on how the pension works. Final Salary? Defined Benefit (Career Average Salary or FS)? Defined Contribution?
It's a private pension. So it goes into a fund and I can access it upon retirement. What you put in, you get out plus growth. It gets put in pre-tax, so that's the benefit. The fund itself VRG 100 VG 150 is described as 'conservative'.
Valuethinker wrote: Thu Aug 05, 2021 3:54 am "Try to stay in Austria". What you want is an EU passport. That's probably easiest either from Austria or Germany? You have *got* to get an EU passport as the UK & EU are set to diverge further. This "honeymoon period" we are on, arguing over Northern Irish sausages, is just a precursor to the constant and interminable set of spats & divergences to come.
Yeah: the issue is employment. There's not an enormous amount of senior options in Austria for my kind of work, so I'll quickly reach a ceiling. You have to stay 10 years to get a citizenship, then I think there's some conditions on your movement after that. Germany is a bit easier, with only 3 years possible as I'm marrying a German.
Valuethinker wrote: Thu Aug 05, 2021 3:54 am arguing over Northern Irish sausages
:oops:
Valuethinker wrote: Thu Aug 05, 2021 3:54 am I can't speak to the law or the tax position. But I would encourage you to have investments in your own name, particularly pre marriage.
Fair point. Thanks!
Valuethinker
Posts: 49036
Joined: Fri May 11, 2007 11:07 am

Re: Austria living/UK citizen - Please help me save my future!

Post by Valuethinker »

nomadboglenoob wrote: Thu Aug 05, 2021 4:09 am
Valuethinker wrote: Thu Aug 05, 2021 3:54 am Certainly maxxing pension sounds reasonable depending on how the pension works. Final Salary? Defined Benefit (Career Average Salary or FS)? Defined Contribution?
It's a private pension. So it goes into a fund and I can access it upon retirement. What you put in, you get out plus growth. It gets put in pre-tax, so that's the benefit. The fund itself VRG 100 VG 150 is described as 'conservative'.
Well the management charges on these things can be fearsome (EU PRIIP legislation is meant to force disclosure of expenses).

However in principle this is a good thing. Long term money that you can't touch, quietly compounding away.

Given your partner is German, not Austrian, my *guess* would be that there is no advantage investing in (her/his) name not yours.
Valuethinker wrote: Thu Aug 05, 2021 3:54 am "Try to stay in Austria". What you want is an EU passport. That's probably easiest either from Austria or Germany? You have *got* to get an EU passport as the UK & EU are set to diverge further. This "honeymoon period" we are on, arguing over Northern Irish sausages, is just a precursor to the constant and interminable set of spats & divergences to come.
Yeah: the issue is employment. There's not an enormous amount of senior options in Austria for my kind of work, so I'll quickly reach a ceiling. You have to stay 10 years to get a citizenship, then I think there's some conditions on your movement after that. Germany is a bit easier, with only 3 years possible as I'm marrying a German.
Valuethinker wrote: Thu Aug 05, 2021 3:54 am arguing over Northern Irish sausages
:oops:
Not to worry. We've moved to sending the Army in to provide 2000 HGV lorry drivers to keep supermarket shelves stocked - to replace the 100k deficit in qualified drivers we now have (we were in effect using EU drivers to fill the gap). So we've stopped talking about sausages :? :?

My own gut feel, and it's no more scientific than that, is that it's only going to get harder for a British passport holder to get citizenship in EU member countries. And one should plan one's life around moving as fast in that direction as one can. You will be aware that the British immigration system can deport lawfully wedded spouses if it is decided they don't make enough money, or that the marriage is determined to be "sham" by the authorities. Or simply refuse them entry when they try to return to Britain from travel overseas - it's already happened. I can't see the rest of the world treating us any better than we treat them (and might well be worse)? I have heard of people whose families fled the Holocaust, who are taking out German (or Austrian?) citizenship to get an EU passport - that's how desperate it is getting.

The tradeoff is of course not getting the Austrian public pension (which might be quite generous). It's impossible to know which is the greater risk (although the pension risk is very tangible and solid, vs my insubstantial fear).
Topic Author
nomadboglenoob
Posts: 30
Joined: Wed Aug 04, 2021 2:18 pm

Re: Austria living/UK citizen - Please help me save my future!

Post by nomadboglenoob »

Valuethinker wrote: Mon Aug 09, 2021 9:51 am Not to worry. We've moved to sending the Army in to provide 2000 HGV lorry drivers to keep supermarket shelves stocked - to replace the 100k deficit in qualified drivers we now have (we were in effect using EU drivers to fill the gap). So we've stopped talking about sausages

My own gut feel, and it's no more scientific than that, is that it's only going to get harder for a British passport holder to get citizenship in EU member countries. And one should plan one's life around moving as fast in that direction as one can. You will be aware that the British immigration system can deport lawfully wedded spouses if it is decided they don't make enough money, or that the marriage is determined to be "sham" by the authorities. Or simply refuse them entry when they try to return to Britain from travel overseas - it's already happened. I can't see the rest of the world treating us any better than we treat them (and might well be worse)? I have heard of people whose families fled the Holocaust, who are taking out German (or Austrian?) citizenship to get an EU passport - that's how desperate it is getting.

The tradeoff is of course not getting the Austrian public pension (which might be quite generous). It's impossible to know which is the greater risk (although the pension risk is very tangible and solid, vs my insubstantial fear).
DEEP SIGH
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