Transfer HSBC Pension As A Non-UK Resident
This article is intended for British Expats who hold HSBC defined contribution pensions. If you have an HSBC defined benefit pension scheme, you may find this article more useful.
HSBC Future Focus Pension Scheme
The HSBC Future Focus Pension Scheme is the bank's primary pension plan for its former and current UK employees, offering both Defined Benefit (DB) and Defined Contribution (DC) options. If you are a member, you can access various resources to manage your pension effectively here.
Key Features of the Scheme:
Defined Benefit (DB) Members: If you're a DB member, your pension is based on your salary and years of service. You can find more information on your pension benefits and how they work on the DB Members Page.
Defined Contribution (DC) Members: For DC members, your pension pot depends on your contributions and investment performance.
HSBC Future Focus | Deferred DC
You are considered a deferred Defined Contribution (DC) member of the Scheme if you are a former employee (or have opted out) and you joined the scheme on or after 1 July 1996.
Our focus is on former employees who are no longer resident in the UK. Specifically, the issues experienced by former employees who are entering retirement and now wish to access their pension pot.
HSBC (UK) Bank Pension Scheme Options
Depending on when you joined the scheme, HSBC will have provided you with the following options.
Take an annuity:
Taking an annuity means converting your pension savings into a regular income for the rest of your life or for a set period. With an annuity, you pay a lump sum to an insurance company, and in return, they provide you with guaranteed income payments.
Withdraw the total value of your HSBC defined contribution pension pot in 2 lump sums:
You can choose to withdraw the entire amount of your Defined Contribution (DC) pension pot as cash lump sums. This means you would receive the full value of your pension in one or more payments, subject to tax.
Keep in mind that withdrawing your pension in this way may impact your retirement income and could have tax implications, as the cash withdrawals are typically taxed as income.
Transfer to another scheme for drawdown income:
You can access your Defined Contribution (DC) pension pot in a way that works best for you. By transferring your DC pension to a Drawdown income provider, you have the flexibility to withdraw any amount, whether as regular income or lump sums, whenever you choose
HSBC Bank (UK) Pension Scheme Transfer To QROPS
Recent changes to pension transfer regulations have significantly reduced the appeal of QROPS (Qualifying Recognised Overseas Pension Schemes) for expats.
Previously, moving a pension to a QROPS provided substantial tax benefits including the removal of UK inheritance tax, for those relocating abroad. However, the Chancellor's October 2024 budget introduced a major policy shift, removing key tax exemptions for transfers to the European Economic Area (EEA), including popular destinations such as Malta and Gibraltar.
As a result, a 25% Overseas Transfer Charge now applies to the total pension value transferred outside the UK if the member does not reside in the same country as the receiving provider. This steep tax has made QROPS transfers financially impractical for most expats, effectively stripping them of their former advantages.
HSBC Pension Transfer To International SIPP
An International SIPP Self Invested Personal Pension is a type of pension plan that allows you to manage your retirement savings while living abroad. The are often considered the best of both worlds as it retains the robust regulation and protection of the UK whilst offering the benefits of an offshore product.
You can learn more about the International SIPP in our guide below:
The International SIPP - The Wealth Genesis
Key Features Of An International SIPP
Flexible Drawdown Options:
Like UK SIPPs, International SIPPs offer flexibility in how you access your pension when you retire, including options like lump sum withdrawals and regular income drawdown.
Wide Investment Choices:
With an International SIPP, you have the flexibility to invest in a broad range of assets, including stocks, bonds, mutual funds, exchange-traded funds (ETFs), and low-cost index tracking funds.
Control and Flexibility:
You have full control over the management of your pension pot. By working with a regulated financial adviser, your portfolio can be managed on an ongoing basis to meet your requirements. This includes overall investment strategy, switching funds including multi-currency investments, and managing how and when you take your benefits.
Tax Advantages:
Depending on your country of residence and tax laws, you can draw down pension income free of UK income tax. The relevant tax will then need to be paid in your country of residence. More information on how to apply for an NT code can be found here.
Consolidation:
You can transfer one or more of your existing pension schemes from the UK into your International SIPP. By consolidating your retirement savings you can reduce costs and have one simple investment strategy implemented.
Retirement Planning:
You can plan your retirement income with your financial adviser by adjusting investments as you approach retirement age, allowing you to tailor your retirement fund to your specific needs and financial goals.
HSBC UK Pension Transfer Advice Non-Resident
Transferring a pension while living abroad can be a challenging decision, particularly for expats. It requires careful consideration of tax laws, pension regulations, and investment options in both the UK and your country of residence.
As specialists in cross-border pension transfers, we assist clients in managing their retirement savings when relocating between countries. We offer tailored advice on pension transfers, helping to minimise tax liabilities, ensure regulatory compliance, and maximise long-term retirement benefits.
Expat Financial Advisers & Services
The Wealth Genesis specialises in assisting British expats worldwide with their financial planning needs.
As an independent and fully regulated firm, we are not tied to any particular providers or investment managers. This independence enables us to offer tailored solutions that align with your individual circumstances and financial goals.
We emphasise transparency by providing a clear flat fee charging structure with no hidden costs. Whether you require advice on your HSBC UK pension scheme or other pension products, our regulated financial advisers are here to help you protect and grow your wealth.
