In 2006 the UK government liberalised the UK pension regime, meaning that British expats and anyone who has previously worked in the UK and contributed to a UK pension plan for more than two years can elect to transfer their pension abroad. The receiving scheme has to be a qualifying recognised overseas pension scheme, known as a QROPS.

There are many potential benefits to such a transfer:

  • A pension free from UK taxes
  • Access to your pension from age 55
  • Pension fund can be passed to beneficiaries free of tax
  • Reduced income tax—your pension funds in the UK could be taxed up to 45%
  • 100% of your pension fund can be passed to your beneficiaries
  • Avoid getting stuck in an underfunded UK Final Salary Pension scheme. Currently over 75% of UK defined contribution schemes are currently underfunded, which may lead to reduced pension benefits.
  • Flexibility of income in retirement
  • Avoid exchange rate risk
  • Establish control of investment choice
  • Consolidation of schemes under one roof

However determining whether to transfer or not is a complex decision, and the above benefits may not apply in every case. As such, the decision for pension transfers must be considered on an individual basis, and expert advice is required.

In essence, if you have pension benefits in the UK you have three main options:

  • Leave your pension funds in the UK
  • Transfer to a qualified recognised overseas pension scheme (QROPS)
  • Transfer to an international self-invested pension plan (SIPP)

Our experienced financial consultants can give impartial and personal pension advice tailored to your individual personal situation and taking into consideration your future plans.

Contact us to discuss your options with regards to pension transfers and all other aspects of your pension and financial planning.

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