4 key moves you should make if you’re thinking of transferring your pension overseas.
For many moving their pension overseas is a big decision to take, one that shouldn’t be taken lightly. We’ve added some steps below for you to take, before you make your final decision:
Advice for Expat Pensions: Research, research, research!!
This is especially true if you’ve been contacted by a company you’ve never even heard of. Scams are frequent and varied, and pensions are no exception. Some will ring alarm bells, others unfortunately may hit you hard in the pocket. Promises of guaranteed and impressive returns should be treated with scepticism. Remember that if it sounds too good to be true, it probably is.
Make sure the scheme you are transferring to is a Qualified Recognised Overseas Pension Scheme (QROPS)
If it’s not, and your current provider allows the transfer they will more than likely face a fine from the HM Revenue and Customs (HMRC) in the UK. They will also risk losing any complaint case that gets taken to the financial ombudsman. These are the reasons why many providers will block overseas transfers to unrecognized schemes. You can find a list of recognized schemes on the HMRC website.
Only use a Certified Regulated Financial Advisor
Pension and taxation rules can be a nightmare to deal with at the best of times, even in the UK, but transferring to another country is a completely different proposition. Transferring your pension abroad can be an extremely complex process to complete. To make sure your money is safe it is best practice to speak to a certified financial advisor. Make sure the Advisor you speak to is a QROPS specialist.
Check your current pension. It may have a guarantee which could give you a better income than your usual amount. Ask your provider if this applies to your pension. You will be able to get this information and also receive an estimate on what the guarantee is worth. It’s not likely that any overseas scheme you transfer to will be able to meet the terms of your current guarantee (this doesn’t mean they won’t be able to match the amount of income)
Ultimately, consulting an expert on your financial matters is one of the most prudent investments you can make to protect your long-term financial security.
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