Scottish Widows Pension Transfer For Non-UK Resident
This article is intended for British Expats who hold pension plans with Scottish Widows.
Scottish Widows is one of the oldest and most well-known life insurance and pension companies in the UK. As part of Lloyds Banking Group, pension plan members now total almost 6 million.
If you live in the UK and have pension savings in one of their schemes, there should be no reason to transfer out.
However, if you have left the UK, you may want to transfer to a more suitable pension fund for expats.
UK Pension Transfer Overseas
A non-UK resident can transfer out of the UK to a Recognised Overseas Pension Scheme ROPS by HMRC. Also known as a Qualifying Recognised Overseas Pension Scheme, QROPS. If you live within the EEA European Economic Area a Maltese-based solution is likely to suit best.
Malta has a Double Tax Treaty with over 60 countries. As such, you can potentially withdraw money from your pension with no tax held back at source. Furthermore, you can invest and withdraw in all major currencies mitigating currency risk.
Worth noting is the abolishment of Lifetime Allowance in the UK Budget of 2023. This was a key benefit outside Inheritance Tax IHT that a QROPS offered.
If you live outside the EEA, you will pay a 25% charge when moving your pension pot from the UK. Also known as an Overseas Transfer Charge OTC. For these residents, we would not consider a QROPS a suitable option.
Transfer Pension from UK to International SIPP
Upon leaving the United Kingdom, a more suitable option is to transfer to an International SIPP. This is a UK pension for non UK residents. It retains UK regulations such as The Financial Conduct Authority FCA, Financial Services Compensation Scheme FSCS and Pensions Regulator.
At the same time still offering the benefits of an offshore product which include;
Ongoing Wealth Management from a regulated financial adviser
Mitigating currency risk
Tax efficiency with withdrawals - Subject to a Double Taxation Agreement DTA being in place between the UK and your new country of residence. Via an NT code, all pension withdrawals can be paid gross of UK tax. The tax treatment in your new country will depend on tax legislation but is usually in line with income tax bandings.
Flexible access to your pension
Furthermore, an International SIPP is far lower cost than a QROPS and UK compliant should you return in the future.
Transfer Pension From Scottish Widows
For a Scottish Widows Pension transfer, the first step is to speak to a specialist expat financial adviser. You can discuss your key objectives for wanting to transfer, whether it's pension access, management, or something else.
Perhaps, upon further discussion, there is no need to transfer out at all. Your adviser can help you understand your options, taking into account other locally compliant investment products.
Expat Financial Advice With The Wealth Genesis
The Wealth Genesis provides quality and cost-effective expat financial advice to clients throughout the world. For a flat fee, we listen and understand your needs before recommending the best product on suitability.
As we are not tied to any provider or investment manager and do not run generic, expensive managed portfolios, we reduce the fees resulting in the superior performance of your portfolio.
FAQs
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Most Scottish Widow's Pensions have no transfer out charges. In certain cases, if you hold a with-profits fund, you can lose out on the bonuses due at the normal retirement age NRA.
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Yes, a workplace pension is a scheme that was set up by your employer. Many Scottish Widows schemes fall under this category.
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First, you will need to speak to a regulated financial adviser to discuss your position in greater detail. You will then need to complete documentation including a Fact Find, Risk Profile and provide your pension policy information. Your adviser will then provide a recommendation report based on suitability.
Once you have confirmed you wish to proceed, the relevant International SIPP or QROPS application and transfer paperwork can be completed. You may need to speak to MoneyHelper, depending on Scottish Widows' due diligence and compliance requirements. The transfer can then proceed. The whole process is likely to take 2-4 months.
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If you’re overseas, for Retirement Account call +44 131 549 9778
For all other pensions call +44 131 549 9772.
