5 Reasons Not To Transfer To An International SIPP
Before deciding to transfer your pension to an International SIPP, it’s important to determine if it’s the right option for you. This guide for British Expats with UK pensions will outline the 5 key reasons you should not consider transferring to this type of pension.
01 A Pension Transfer May Not Be Necessary
Before deciding to transfer your pension to an International SIPP, it’s crucial to determine if it’s the right option for you, or if it’s even necessary.
Begin by contacting your current UK pension scheme provider to understand how they will support you as a non-UK resident.
Ask key questions, such as whether they will provide full flexible drawdown access, allow you to continue actively managing your investments, and give you full control of your portfolio. Confirm they will make payments into your international bank account and can offer multi-currency investment options.
If your existing provider offers these benefits, the cost and effort of a pension transfer may not be justified. In this case, remaining with your current UK pension provider may be the best decision.
02 A Transfer May Be Too Costly
Pension transfers can be expensive, so it’s crucial to understand exactly what you’re paying. If an adviser cannot provide clear and transparent information about their charges, consider this a red flag.
Fees should never be vague or overly complicated. Many international financial advisers can charge between 1% and 5% of your total pension value, with some even charging more. Over time these costs can significantly erode your pension income.
At The Wealth Genesis, we take a different approach. We offer a one-time flat fee of £3,000 for all pension transfers, regardless of the pension value or the number of schemes being transferred. Our annual management fee is a straightforward 0.85%.
With us, you can trust in honest, transparent pricing and advice - no hidden charges, no unpleasant surprises.
03 A Locally Compliant Bond May be More Suitable
Whilst the International SIPP can be a great option for expats in certain jurisdictions, it may not always be the most suitable choice.
If you’re moving to countries like Portugal, Spain, or France, there are locally compliant financial solutions - such as bonds or life assurance policies – which are specifically designed for expats.
These products often provide significant advantages, including high tax efficiency, and in some cases, they may be held within a tax-free wrapper. Additionally, they often include a strong investment component, offering the potential to grow your retirement funds over time.
To explore the most suitable options for your new country of residence, it’s wise to consult with an expat financial adviser who can provide tailored guidance.
04 You Have Not Found an Expat Adviser You Can Trust
When considering your pension transfer options, it’s important to be aware that some financial advisers operate on high-commission models or have affiliations with specific providers or products.
In the international market, some advisers may exploit these ties, pushing solutions which might not align with your unique circumstances or financial goals.
The Wealth Genesis takes a different approach. We work with our clients to create a holistic and tailored wealth management strategy, rejecting one-size-fits-all solutions.
As we are fully independent and regulated, we work on a zero-commission basis, enabling us to provide honest, unbiased advice which truly serves the best interests of our clients.
Given the potential risks associated with pension transfers, the importance of working with a trusted and transparent adviser cannot be overstated.
05 A Transfer May Be Too Complex or Time Consuming
Transferring your existing pension scheme can sometimes lead to complications and added stress, especially if the process becomes lengthy and complex.
This is often the case with defined benefit schemes, which can take many months to finalise. The extended timeline can create frustration and uncertainty, making it crucial to carefully assess whether a transfer is truly the right choice for your circumstances.
Understanding the potential challenges beforehand can help you make an informed decision and prepare for the process.
The International SIPP For Expats
If you’re a UK expat living abroad and none of the situations highlighted above apply to you, the International SIPP may be the ideal pension solution.
Specifically designed for UK expats, this scheme offers exceptional flexibility, including full flexible access drawdown once you retire. Its portability ensures you can manage and access your investments from anywhere in the world, making it perfect for frequent travellers.
With complete control over a wide range of investment options, you can build a diversified portfolio tailored to your goals. Additionally, because the scheme remains UK-based, your pension benefits from the protection of UK regulators like the FCA (Financial Conduct Authority) and the FSCS (financial services compensation scheme). The International SIPP also helps mitigate currency exchange risks by allowing you to hold and invest in multiple currencies.
At The Wealth Genesis, we provide fully independent and unbiased advice, helping expats choose the right International SIPP for their unique needs and financial aspirations. We can also explore alternative solutions which may be more suitable.
To learn how we can help with your overseas retirement planning, book a free discovery call with one of our advisers using the diary below.
International SIP FAQs
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Most expat financial advisers will charge between 1% and 5% of the total values of pensions being transferred.
We believe anything over 3% is excessive, which is why we charge a flat pension transfer fee of £3,000, based on a minimum transfer value of £100,000. -
The answer depends on your providers, however from submission the process will typically take around 1-3 months.
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Post Brexit, most UK pension providers are reluctant to offer full flexible access benefits to international policy holders, due to licensing issues, as well as the cost of administering the policies and paying into accounts overseas. It’s for this reason benefits may be restricted, and you may be encouraged to transfer.
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At the time of writing (January 2025), we believe the Novia Global SIPP is the best solution for our clients.
It is the lowest cost when factoring in SIPP and platform fees, and has a brilliant user interface and administrative team, to ensure all payments are sent in a timely manner.
We are not tied to any product, so if a better alternative became available we would consider the options.
