Flat Fee UK Pension Transfer To US
LEARNING OBJECTIVES
We provide high quality, relevant and up-to-date retirement advice to British Expats in the USA.
IN THIS ARTICLE, YOU WILL LEARN THE FOLLOWING:
How to transfer your UK pensions to the US for a flat-fee
The benefits of transferring your UK schemes
How the transfer process works for different types of pensions
The best retirement account for US residents
The Wealth Genesis specialises in providing SEC regulated financial advice to British expats residing in the United States.
Classed as a fiduciary, we act only in our client's best interests, with no ties to any product, provider or investment manager.
We charge a flat-fee of £3,000 to transfer your UK pension pots to the US, regardless of the number of pensions or the total value.
We also charge an industry leading annual management fee of 0.85% per annum, meaning lower running costs for your accounts and greater growth potential.
Our advice team is qualified both in the USA and the UK to provide the most appropriate advice to our clients. All individual adviser qualifications are available upon request.
How To Transfer UK Pension To US?
The first step when considering a UK to US pension transfer is understanding the types of pensions you hold. There are 2 main types of UK pensions - defined contribution and defined benefit. These have different features and will form different parts of your retirement plan if you live in the USA.
01 Defined Contribution (Money Purchase Pension Scheme)
These are by far the most common types of personal pensions that UK residents hold. These pensions are much more simple to understand.
They are simply invested in financial markets (bonds, equities, alternatives) and the value of the pension is directly tied to how the investments are performing. In order to transfer your pension (defined contribution), legally you do not need to take FCA regulated financial advice from a UK based financial adviser.
Note, the UK government can change pension law and due-diligence for defined contribution pension transfers have increased over the last few years with the introduction of the pension transfer flag system.
The main providers of these pensions are Aviva, Aegon, Standard Life, Scottish Widows, Reassure and Royal London.
02 Defined Benefit (Final Salary Pension Scheme)
These types of pensions hold far more valuable benefits, as they essentially pay you a guaranteed income for life once you reach retirement age. Whilst these benefits are usually never worth transferring away from, you should also be aware that should you pass away, typically only 50% of your pension can be passed on to your spouse.
To transfer a defined benefit scheme, you legally have to take FCA regulated pension transfer advice which can be costly, as well as complete additional questionnaires and documentation. The whole process can typically take 3-6 months to complete, and should be considered very carefully with an independent wealth manager.
Where Do I Transfer My UK Pension If I Live In The US?
You cannot transfer your UK pension to a 401k or IRA in the US. This is because UK and US pensions operate under very different rules and are not considered like for like.
The UK government only permits pension transfers for non-UK residents to schemes that mirror UK pension legislation, such as recognised overseas pension schemes or self-invested personal pensions.
Given the overseas transfer charge for US residents, a qualifying recognised overseas pension is no longer an option for US residents.
The SIPP For US Residents
The US SIPP, or International SIPP for US residents is almost always the best solution for British Expats.
This type of pension scheme allows you to consolidate all your UK pensions at a low-cost, access a wide range of investments, hold your pension in all major currencies, and perhaps most importantly gives you full-flexible access draw-down for your international retirement.
This means you can access your pension funds as an when you want as a US resident without having to pay UK taxes.
You can see our full review of the US SIPP here.
Financial Advice For British Expats In The USA
To understand how we can help you with your life abroad, schedule an initial consultation using the button below.
We begin the advice process with an initial discovery meeting, before implementing a commission free strategy to secure your retirement abroad.
FAQs
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Not necessarily. If your UK pots will give you full access in retirement in the US, and allow you to manage your investments in USD, then there may be no requirement to transfer.
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Most advisers charge a percentage between 1% and 5% based on the total value of your pensions.
We charge a flat-fee of £3,000, regardless of your circumstances, and our annual management fee is 0.85% per annum.
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For defined contribution pension transfers to the US, it typically takes between 1-3 months. For defined benefit, usually 3-6 months.
