Fidelity Pension Transfer for Non-UK Residents
LEARNING OBJECTIVES
We’re passionate about providing free, high quality and up-to-date information to Expats around the world.
IN THIS ARTICLE, YOU WILL LEARN THE FOLLOWING:
Why Fidelity has limited options for Expats
How to transfer your Fidelity pension scheme
The cost of transferring your Fidelity pension
How The Wealth Genesis differs from other firms
Best practise when considering working with an adviser
Do you hold a Fidelity Pension as a non-UK resident?
Can you not access your Fidelity SIPP due to living outside the UK?
Does your Fidelity Pension scheme not allow ongoing management or access, as you do not live in the UK?
Post-Brexit, the options for non-resident Fidelity pension holders have become somewhat limited.
In this article, we will outline the position and associated costs with a Fidelity Personal Pension transfer for Expats and non-UK residents.
Note, by transferring your scheme you will still need to be of age 55 or older to gain access to income. Furthermore, the tax-free element (PCLS - Pension Commence Lump Sum) is likely to be taxable depending on your country of residence.
Be sure to always consult with an adviser to clarify your specific tax position.
Fidelity SIPP Overview
The Fidelity SIPP is one of the best products available for UK residents with pension savings. The Fidelity SIPP has an extensive investment choice combined with a functional online web portal. Additionally, you have access to smart investment selection tools with minimal service limitations whilst being competitively priced. The product is available both with and without investment advice.
Fidelity Pension Scheme Issues
The Fidelity SIPP is a UK pension for UK residents. When you become a resident outside the UK, you are told you cannot continue to manage or have your investments managed for you.
Depending on when you opened your SIPP, you can also lose flexible access. This means, if you require income, you will need to withdraw the full amount, likely resulting in a significant tax liability.
As such, a Fidelity pension scheme transfer is the only viable option for Expats who wish to have control over their retirement provisions.
Why is Fidelity Restricting my Pension Options?
The main reason is due to licensing restrictions, and no desire to be involved in international financial planning. Pre-Brexit, UK financial products and advisers could passport into Europe and other regions under their FCA license. This ability was lost with Brexit and as a result, clients are required to consult with regulated international financial advisers to explore their options.
How Can I Transfer my Fidelity Pension as a Non-UK Resident?
There are two pension accounts available to consider when looking to transfer your account as an Expat.
1) QROPS, which stands for Qualifying Recognised Overseas Pension Scheme. A detailed explanation of the structure and benefits of a QROPS can be found here.
2) International SIPP (International Self Invested Personal Pension): A detailed explanation of an International SIPP can be found here.
Depending on your specific objectives and requirements, one of the two products will be more suitable. Following the March 2023 budget and the removal Lifetime Allowance Limit, an international SIPP is the best solution for the vast majority of Expats looking for a Fidelity SIPP transfer.
Whilst QROPS schemes do have certain benefits, which include increased flexibility with the investments, they also have several major drawbacks.
The main of these are increased ongoing costs and a lack of regulation and jurisdiction. Most QROPS accounts will cost significantly more than an International SIPP, due to heightened trustee fees.
These accounts are also typically based out of Malta, and as such do not fall under UK FCA regulation, nor the coverage of the Financial Services Compensation Scheme (FSCS).
We believe the Novia Global International SIPP is currently the best offering on the market for the majority of Expat retirees. A full review of the Novia Global SIPP and the investment platform can be found here.
How Much Does a Fidelity Pension Transfer Cost?
Costs vary per advice firm but can be broken down into 2 areas:
Commision: Commision-based advisors are remunerated by the product and fund providers. In simple terms, these adviser are paid to sell you a product, and as such will not be operating in your best interests.
Fee: Fee based advisers charge an initial fee, usually a percentage based on the value and then an ongoing fee for the management of the policy.
With this structure, you are advised on the suitability of the product and fund range, thus removing the conflict of interest when your adviser is getting paid by the product provider.
The Wealth Genesis charges a flat fee (£3,000) and an industry-low, ongoing percentage of the investment value (0.85%). This is regardless of the size of the investment or the number of schemes you wish to consolidate.
By focusing on maintaining client relationships and delivering positive outcomes, we're able to provide independent advice, at an industry leading fee.
To learn more, see our client testimonials.
Independent Expat Financial Advice | Our Verdict
The world of international wealth management is complex, and occasionally opaque.
We implore all Expats around the world to conduct thorough due-diligence prior to engaging with any firm to transfer their pension abroad. Be sure to check the adviser's regulatory permissions and understand exactly what they are charging you for the service, to the pound and pence.
Fees and commissions will erode the value of your pension fund, and can lead to issues in retirement.
Ensure to work with a fee-based adviser, who does not charge commissions or insert lock-in periods and exit penalties.
To discuss your requirements in greater detail, use the diary below to schedule an initial consultation with a member of our team.
FAQs
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This is due to advisers utilising commission-based products for Expats, and using marketing material to sell certain products.
Be sure to only work with fully independent businesses with no ties to any products, pensions or providers. -
It depends on how quickly you are prepared to complete paperwork and sign documentation.
In the best case scenario, a transfer can be completed in 2-3 months. -
The best way is to identify their charging structure.
If things seem opaque and confusing, and you see the words ‘exit penalty’, or ‘lock in’ or ‘early surrender charge’ this means that the adviser is working off commission and not in your best interests.
