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Presently people with a UK pension living outside of the UK in an EU country are able to transfer their pension and vice versa. However, the rules will likely change with significant tax implications.
If you no longer live in the UK, it’s important you properly understand the choices you have so that you can best achieve your personal financial goals. You have three choices regarding your pension: Leave it in the UK. Transfer it to a SIPP (Self Invested Personal Pension). Transfer it to a QROPS (Qualifying Recognised Overseas Pension Scheme).
You may well be aware that that in 2015 the British government introduced some radical changes around what can be done with pension savings. The result is that today, anybody with pension benefits in the UK has more freedom around the type of savings and investments that can be held in a pension – and how and when they can be used in retirement.
Similar to most pension schemes, a SIPP is like a shopping basket, within which you can hold different types of savings and investments and receive tax benefits. However, where it differs is that it is likely to give you much more choice and control. If a personal or company pension can be viewed as a small convenience store, a SIPP can be viewed more like a supermarket – giving you access to the whole range of different products and the best of breed investment and saving products. On top of this, a SIPP also gives you more options when it comes to using your pension pot once you decide to retire.
Presently people with a UK pension living outside of the UK in an EU country are able to transfer their pension and vice versa. However, the rules will likely change with significant tax implications.
If you no longer live in the UK, it’s important you properly understand the choices you have so that you can best achieve your personal financial goals. You have three choices regarding your pension: Leave it in the UK. Transfer it to a SIPP (Self Invested Personal Pension). Transfer it to a QROPS (Qualifying Recognised Overseas Pension Scheme).
You may well be aware that that in 2015 the British government introduced some radical changes around what can be done with pension savings. The result is that today, anybody with pension benefits in the UK has more freedom around the type of savings and investments that can be held in a pension – and how and when they can be used in retirement.
Similar to most pension schemes, a SIPP is like a shopping basket, within which you can hold different types of savings and investments and receive tax benefits. However, where it differs is that it is likely to give you much more choice and control. If a personal or company pension can be viewed as a small convenience store, a SIPP can be viewed more like a supermarket – giving you access to the whole range of different products and the best of breed investment and saving products. On top of this, a SIPP also gives you more options when it comes to using your pension pot once you decide to retire.
There are a number of benefits to investing in a SIPP, including the following:
There are a number of benefits to investing in a SIPP, including the following:
Usually whenever anyone works in the UK, they will build up contributions into a UK Pension Scheme. This could be by way of either; their employee contributing on their behalf, the employee contributing, or both the employer and employee contributing into a UK Pension Scheme. Subsequently when they leave the UK, the pension contributions they have accumulated, are left behind and remain in the UK Pension Scheme. There are significant benefits that could be obtained by transferring your UK Pensions into a QROPS.
However it is important to note that there are downfalls to a QROPS including a transfer fee that will set you back 25%.
A QROPS is a Qualifying Recognised Pension Scheme, commonly used by expats living in countries such as Switzerland, Denmark, Sweden, the Netherlands, and France. It allows you to pick up your pensions from the UK and transfer them into another jurisdiction.
Prior to 2006, anyone who left the UK would leave their pensions behind. Basically, this pension would be dormant, as they would no longer being any contributions being made, and would remain dormant until the member reached their retirement age, usually 65. So the individual would still have to follow UK pension rules even if they have since left the UK.
This all changed in 2006 with the introduction of QROPS, which is an approved HRMC scheme.
Usually whenever anyone works in the UK, they will build up contributions into a UK Pension Scheme. This could be by way of either; their employee contributing on their behalf, the employee contributing, or both the employer and employee contributing into a UK Pension Scheme. Subsequently when they leave the UK, the pension contributions they have accumulated, are left behind and remain in the UK Pension Scheme. There are significant benefits that could be obtained by transferring your UK Pensions into a QROPS.
However it is important to note that there are downfalls to a QROPS including a transfer fee that will set you back 25%.
A QROPS is a Qualifying Recognised Pension Scheme, commonly used by expats living in countries such as Switzerland, Denmark, Sweden, the Netherlands, and France. It allows you to pick up your pensions from the UK and transfer them into another jurisdiction.
Prior to 2006, anyone who left the UK would leave their pensions behind. Basically, this pension would be dormant, as they would no longer being any contributions being made, and would remain dormant until the member reached their retirement age, usually 65. So the individual would still have to follow UK pension rules even if they have since left the UK.
This all changed in 2006 with the introduction of QROPS, which is an approved HRMC scheme.
As previously mentioned, while there are certain benefits with a QROPS, as of March 2017, transfers outside of the EU or EEA are subject to a 25% transfer charge. Therefore while QROPS is not totally closed it is only advisable in specialised cases. An alternate option to a QROPS is a SIPP – Self-Invested Personal Pension.
To find out which type of scheme best suits your needs and delivers the highest returns speak with an expert today.
As previously mentioned, while there are certain benefits with a QROPS, as of March 2017, transfers outside of the EU or EEA are subject to a 25% transfer charge. Therefore while QROPS is not totally closed it is only advisable in specialised cases. An alternate option to a QROPS is a SIPP – Self-Invested Personal Pension.
To find out which type of scheme best suits your needs and delivers the highest returns speak with an expert today.
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