Flexible Pension Plans For Non-UK Residents
For British expatriates, finding the right pension solution is essential to feeling financially secure in your new life abroad. A key feature many expats look for is full flexibility when it comes to accessing their pension savings.
In this guide, we’ll explore the pension options available to help you make the most of your retirement while living overseas.
Pension Plans For UK Expats
Unfortunately, many traditional UK pension providers, such as Aviva, Aegon, Scottish Widows etc. no longer offer full flexibility to non UK residents.
Some simply choose not to deal with expats due to the complexities of cross-border regulations, while others may not want the responsibility of ensuring compliance with international tax laws or double taxation agreements (DTAs).
As a result, if you move abroad, your UK pension provider may severely limit your options, making it difficult to actively manage your pension. In some cases, providers may require non-residents to withdraw their entire pension as a lump sum, which could trigger a significant tax bill.
Alternatively, they may only allow you to purchase an annuity, which is currently an unattractive choice due to high annuity rates, influenced by recent interest rate increases. If you're considering an annuity, be aware of currency risks, as payments are typically made in GBP. Exchange rate fluctuations could impact the value of your retirement income, limiting your control over your pension payments and creating potential currency conversion challenges.
The Wealth Genesis - The International SIPP
Full Flexible Access As A Non-UK Resident
There are many reasons why expats seek full flexibility when accessing their pension. Having control over withdrawals allows you to take income as needed rather than receiving fixed payments, which is particularly useful as your financial circumstances change.
Flexibility also plays a key role in tax efficiency, as different countries have varying tax laws. Being able to adjust your drawdowns can help you manage and minimise your tax liabilities.
Additionally, currency exchange rates can impact your pension income. If your pension is in GBP, having control over when you withdraw funds enables you to take advantage of favourable exchange rates and avoid potential losses due to fluctuations.
The International SIPP | A Solution for Non-Residents
For UK expats living abroad, the International SIPP (Self-Invested Personal Pension) offers a flexible and tax-efficient solution for managing retirement savings.
Designed specifically for non-residents, this UK-based pension scheme provides full control over investments while retaining the protection of UK regulatory authorities, including the FCA, FSCS, and Pensions Regulator Some Key Benefits include:
Full Flexible Access
The International SIPP provides fully flexible drawdown options, giving you complete control over how you access your pension. Whether you prefer regular payments, occasional withdrawals, or a combination of both, you can tailor your income to suit your financial needs. This flexibility also allows for tax-efficient drawdown, enabling you to strategically manage your income and stay within your desired tax brackets.
Diverse Investment Choice
With this scheme, you can keep your pension invested and benefit from potential capital growth, giving your retirement savings the opportunity to grow over time. You’ll have access to a wide range of investment options, including ETFs, mutual funds, and individual shares, allowing you to build a diversified portfolio which aligns with your financial goals and risk tolerance.
Multi-Currency Options
The International SIPP helps you mitigate currency exchange risk by giving you the option to hold and invest in multiple currencies. This flexibility ensures that your retirement savings are protected from potential exchange rate fluctuations and reduces the impact of currency losses.
Pension Transfer Advice For Non-UK Residents
With its low-cost structure and flexible draw-down options, the International SIPP is undoubtedly the best pension solution for UK expats living abroad.
At The Wealth Genesis, we specialise in cross-border wealth management and assist non-UK residents in transferring their pensions to more suitable solutions, including the International SIPP.
As a fully independent firm, we provide honest and unbiased advice based on the whole market, ensuring that the solutions we offer are tailored to your unique needs and financial goals.
To find out how we can help you make the most of your retirement savings, book a free discovery call today using the diary below.
Expat Pension Transfer FAQs
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Post Brexit, UK pension providers are reluctant to offer full benefits and service to non-UK residents, due to the issues surrounding regulation and ‘passporting’.
By using an International SIPP, you can regain full control of your pension pots as you navigate life abroad.
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In the past, there have been 2 viable options. These are a QROPS and an International SIPP.
With the recent budget changes in the UK, QROPS are typically no longer an option (unless you live in Malta or Gibraltar) as you will incur a 25% overseas transfer charge. -
We charge a flat-fee of £3,000 for all pension transfers, regardless of the number of pensions being transferred or the total value.
Most expat financial advice firms will charge between 1% and 5% of the total pension transfer value. -
We believe the best International SIPPs on the market are offered by Novia Global & Morningstar International.
There are dozens of SIPPs available. The key considerations are cost, servicing and administrative procedures.
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Yes, an ISIPP can pay into any local or international bank account, as long as the account is in your name.
