a guide to overseas options for uk pensions...a guide to overseas options for uk pensions...
TRANSCRIPT
A Guide to Overseas Options
for UK Pensions
A GUIDE TO OVERSEAS OPTIONS FOR UK PENSIONS
Introduction 3
What is a QROPS? 4
Benefits of a QROPS 5
Benefits of a Pension Review 6
Frequently Asked Questions 7
Contact Us 9
EXPAT PENSION TRANSFERS | 2
Mr C - Hong Kong
I transferred my two pension funds, that brought
a better balance and introduced new opportunities.
I always feel that they put my best interests first.
“”
INTRODUCTION
EXPAT PENSION TRANSFERS | 3
Approximately 350,000 Britons are leaving the UK every year in search of a new life overseas. This number has been climbing in recent years and a report has indicated that almost 50% of British people would like to retire overseas and away from the UK.
Many Foreign Nationals work in the UK and build up pension funds, however it is their intention to return home for their retirement. It does not make financial sense that these people leave their pensions in the UK.
People’s attitude to retirement has changed with more people choosing to retire earlier and work part time, run businesses, spend time exploring and discovering new countries, and some developing new skills.
The ability to move your retirement assets, allows for greater flexibility and choice in your later years. Whether you are British with a British pension or a Foreign National with a British pension, it is recommended that you understand all the pension options open to you.
Taking regular financial advice
can improve your income in
retirement by 53%
“”
WHAT IS A QROPS?
EXPAT PENSION TRANSFERS | 4
The Qualifying Recognised Overseas Pension Scheme was launched on Thursday 6th April 2006 as a direct result of EU Human Rights legislation regarding the free movement of capital. A QROPS (or a ROPS as recently renamed by HMRC) is an overseas pension scheme that meets certain criteria laid out by Her Majesty’s Revenue and Customs.
These pension schemes can accept a transfer of funds without incurring any penalty and allow individuals who have built up benefits, whilst working in the UK, the ability to move them to a more favourable jurisdiction if they are planning to retire outside of the UK.
The Pension Scheme can hold a wide range of investments, excluding property or any physical assets, and denominated in various currencies of your choice. The payments options are flexible to suit your lifestyle and financial requirements.
It is recommended that the minimum level of pension assets required to setup a QROPS is £50,000. You will have the opportunity to maximise the growth and income potential of your pension, whilst not being limited by British pension legislation and the life time allowance.
Over £9BN
has been transferred since 2006
BENEFITS OF A QROPS
EXPAT PENSION TRANSFERS | 5
CONSOLIDATIONMost people have worked in various jobs and paid into different pensions, a key benefit of a QROPS is the ability to consolidate all your funds into one scheme. This al lows for easier investment management of the assets and administrative simplicity.
TAXESOnce your pension funds have been moved from the UK, all UK taxes are eliminated on any future income streams. In a QROPS the growth of your funds are not subject to any capital gains or income/dividend tax. It is possible to still take a 25% tax free lump sum, depending on local laws.
LIFETIME ALLOWANCEOnce your UK Pension assets have been transferred away from the UK, there is no lifetime allowance limit on the growth of the fund or future savings into the scheme. The LTA has recently been reduced to £1m, if you are 40 years old with a £300k pension growing at 5% a year your pension will be over £1m at retirement age.
GROWTHOpen architecture allows for a wider range of investments, a QROPS can be held or invested in all major currencies. The choices are much greater than with a standard pension scheme in the UK, alongside more transparent charging structures.
ACCESSTypically you can access the funds in a QROPS earlier than your existing holdings, and any time from the age of 55. Most people find they have increased income drawdown and a greater flexibility. Potentially up to 100% is accessible, subject to local laws and jurisdiction.
BENEFICIARIESEasy processes to leave all your unused pension assets to your beneficiaries free of UK Inheritance Tax.
FUTURE CHANGESOnce your funds have left the UK, they will not be bound by any future pension legislation changes or any potential fallout from Brexit.
BENEFITS OF A PENSION REVIEW
EXPAT PENSION TRANSFERS | 6
Research shows that people who take regular financial advice enjoy a higher level of income in retirement.
The first step is to talk with one of our experienced advisers who specialise in advising expats with similar circumstances to you, and being an expat themselves they will understand your position.
This allows the pension company to send the adviser all relevant valuations, related benefits and guarantees. All of this information will be used in your Pension Review.
A Pension Review will benefit you:
You will receive a detailed and personalised pension analysis and retirement income reportA free pension tracing service, to ensure all your pension funds are located and consolidatedFree up to date valuations on all of your UK pension assets An understanding of the performance of your UK Pension fundsProfessional independent actuarial analysis of your Defined Benefit schemes
Once you have decided the best option to suit you, the adviser will be able to organise the paperwork and have this sent to you. They will aid you in completing the required forms and organise collection when you are ready.
The adviser will make investment recommendations for the funds, you will have regular reviews and receive quarterly reports on the performance of your scheme.
FREQUENTLY ASKED QUESTIONS
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What are the minimum size of pension funds required to make a QROPS worthwhile?We would recommend a minimum of £50,000 to transfer into a QROPS. Your adviser will compare fees and select the most suitable scheme for your funds. All costs are transparent unlike most UK pension schemes.
I have lots of small pensions, is it possible to consolidate them into one fund?This is one of the main benefits of a QROPS. The average person now has 11 jobs throughout their work life so it makes sense to consolidate pensions into one fund.
Can my State Pension be transferred into a QROPS?Unfortunately there is no way to transfer your State Pension into a QROPS. It will always stay with the UK Government.
I have a final salary pension - can I move it?Defined Benefit schemes cannot be moved once you have started receiving the benefits. If you have not started drawing the pension then it is definitely worth considering moving. There are 6,000 DB schemes in the UK and it is believed that over 1,000 will never meet their liabilities.
I have a government pension, what are my options?If you have a NHS, Teachers Pension or Military pension, unfortunately there is no way to move these now. If the pension fund is ‘unfunded’ it will not be possible, however, there are some Government schemes such as the LGPS which can be transferred.
EXPAT PENSION TRANSFERS | 8
zI’m drawing down my UK pension, can I still transfer?If you are drawing down a private Defined Contribution pension, and have not bought an annuity then it should be possible. Once an annuity has been purchased, it would not be advisable to change this.
What happens if I return to the UK?The QROPS will be comparable to a UK Pension, however only 90% of a QROPS income is subject to UK income tax and the lifetime allowance no longer applies to the fund.
Will I ever have to buy an annuity?With a QROPS, there is no requirement to ever purchase an annuity.
Where can I invest the pension funds once transferred to a QROPS?The funds can be invested in a wide range of investments, excluding property and physical assets, and in any currency.
What happens to my pension when I die?A QROPS can be passed on very easily to your beneficiaries
How long does a pension transfer take?Generally a pension transfer will take up to a maximum of 6 months from the date the trustees receive your transfer paperwork.
When can I start taking benefits from my pension?Once you have reached the age of 55, you can start to draw your benefits.
Over 110,000 people have moved their UK pension
funds overseas
CONTACT US
EXPAT PENSION TRANSFERS | 9
Expats have a greater financial potential once they have become resident overseas.
Understanding how you can take advantage of your benefits is important. The Pension Review will highlight your financial options and allow you to easily compare your choices.
One of our staff will be in touch shortly, to arrange a convenient time for you to discuss your situation and UK pension holdings with an adviser.
The Executive Centre, Level 16, 41 Connaught Road, Central, Hong Kong.
DisclaimerInformation provided on this website is general in nature and is not financial advice. Expat Pension Transfers endeavours to update the website as needed. Information can change without notice and Expat Pension Transfers does not guarantee the accuracy of information on the website, including information provided by third parties, at any particular time. Before making any decision, we recommend you consult a financial planner to take into account your particular investment objectives, financial situation and individual needs. Unless otherwise specified, copyright or information provided on this website is owned by Expat Pension Transfers. You may not alter or modify this information in any way.
Initial discussion to understand your objectives
Give the adviser written authority to approach your pension company to request your current transfer values and related benefits
Full analysis of your pension
FREE bespoke report based upon your circumstances and detailing your options
If you decide to proceed with one of the options, the adviser will help you with the paperwork and related documents
The adviser will help with you with your investment decisions based on your risk profile