Should I Transfer My UK Pension?

If you no longer live in the UK it is important that you review your options regarding your Final Salary pension scheme, a possible transfer should be considered.

Great care must be exercised when considering this option as your Final Salary scheme includes valuable benefits. It is of utmost importance that you receive appropriate independent advice. For many, a Final Salary pension will provide the basis of a comfortable income in retirement. However for a growing number, given their personal circumstances, a transfer can prove very beneficial.

Can I make a pension transfer when I move abroad? When moving abroad a common question asked by Expats is what will happen to my pension? There are three main options to enable a pension transfer:

  • SIPP – Self-Invested Personal Pensions
  • QROPS – Qualifying Recognized Overseas Pension Schemes

Final Salary pension scheme transfer values are the highest they have ever been, mainly due to the way they are calculated. The historically low UK interest rate means that the transfer value you are offered has to be far higher to equal the pension you are relinquishing.  Also, many UK Defined Benefit (DB) pension providers are offering financial incentives to transfer out of a scheme, as they want to remove what they see a growing cost to the company. This can make it far more likely that a transfer to a QROPS or SIPP will produce a higher income than that provided by a UK scheme. In some cases this can be double the income that would have been provided by the UK scheme. This coupled with a return of the total fund on death with no UK tax due. Which can be a figure four times that paid out by a UK scheme will make a transfer to a QROPS or SIPP very attractive.

There is also the fact that as the Cash Lump Sum from a QROPS or SIPP is based on the total transfer value, which will be very high at this time. The resulting figure can be a third greater than the CLS figure offered by the UK scheme.

The Transfer Process

In order to assess whether your existing UK Final Salary (DB) scheme should be transferred or not, you first need to apply for the cash equivalent transfer value of the members’ benefits. Once this is obtained you then need this to be evaluated regarding a transfer to a Defined Contribution arrangement.

As part of the advice process you need to obtain a comprehensive TVAS (Transfer Value Analysis) report. A UK FCA regulated adviser who is a Specialist in Final Salary transfers must undertake this. Given that you no longer live in the UK you also require advice given by an international IFA who specializes in Final Salary transfers.

If you undertake your transfer using Expat SIPP:

  • The Initial advice is free of charge.
  • No cost to obtain the comprehensive TVAS (Transfer Value Analysis) report.
  • Ongoing advice regarding your QROPS /SIPP.

How Expat SIPP Can Help You:

  • Knowing all the pension options open to you
  • The key benefits the various schemes (QROPS, SIPP etc.)
  • The tax implications you need to be aware of.

If you would like to have more information on transferring your pension, or if you would like to seek advice from a pensions expert, please contact us at hello@expatsipp.com.