Leaving The UK | Your Pension Options
If you're considering moving or retiring to another country, it’s important to pay careful consideration to your UK retirement pots.
Rest assured that although the life of an expat may be challenging, the management of your pension can be easy and stress-free.
Whether you’re working abroad or enjoying retirement, there are a few options available to ensure that your pension is well managed and protected.
01 Leaving Your Pension In The UK
You may decide to leave your pension as it is, with your current provider in the United Kingdom. Although this keeps things simple, it could be a problem if you can't access your pension in your new country of residence. Some plans might impose additional fees or charges when withdrawing funds from overseas.
Managing your pension from another country can be difficult and therefore may not be the best long term option. Additionally, you may be sacrificing ongoing financial advice and portfolio management.
Exchange rate fluctuations could impact the value of your pension when converted to your new local currency. This could result in reduced purchasing power when the time comes to access your funds.
02 Transferring To An Overseas Pension Scheme
Another option is to transfer to a Qualifying Recognised Overseas Pension Scheme or a QROPS.
This can provide you with more flexibility and access to your retirement funds, as well as some potential tax advantages. However, it is not advisable for individuals who plan on moving to the United States or anywhere outside of the European Economic Area, as this will incur a staggering 25% transfer fee.
QROPS also usually have higher management fees than UK pensions, which can reduce the value of your pension pot in the long run.
Whilst UK pensions are safeguarded by the Pension Protection Fund (PPF), the country where your QROPS is located may not provide the same level of security, potentially putting your money at risk.
You could also lose out on certain UK pension benefits such as guarantees, flexible draw-down options and death benefits which may not be available with a QROPS.
03 Choosing A UK Pension Scheme For Non-UK Residents
An International Self Invested Personal Pension (SIPP) is a scheme based in the UK for non-residents. This option provides security through regulation by the Financial Conduct Authority and the Financial Services Compensation Scheme. It also allows for flexible access to your retirement funds.
By choosing an International SIPP, you can allow the ongoing management of your portfolio by a British Financial Adviser, as well as the freedom to return to the UK with ease should you ever choose to.
You may even be able to receive UK tax free pension income - providing you are residing in a country with a double taxation agreement with the United Kingdom, you can obtain an NT code, and receive all withdrawals gross of any UK tax.
An International SIPP is generally the best choice for expats moving abroad as it offers great benefits, convenience, and security.
You can find a comparison of the best international SIPPs here.
The Benefits Of Expat Financial Advice
Consulting financial advisers who specialise in expat pensions can help you to optimise your pension arrangements and understand the implications and risks of either moving your money abroad or leaving it in the UK.
The Wealth Genesis is fully regulated to provide retirement and investment advice to British Expats outside of the UK.
Our independence ensures no conflicts of interests, commissions or hidden fees in the advice process
To learn how our expert and regulated team can help with your pension options abroad, schedule a free initial consultation using the link below.
