Pension Transfers

Pension Transfers

Now that you have started saving for your pension, what happens if you move out of the country to settle somewhere else? What happens to your current pension and its contents? Will the complete pension transfer occur? All these questions are likely to be on your mind, especially if its money that you’ve been saving for a long time. There are a number of advantages and disadvantages to pension transfers. Make sure that you know exactly what you are doing and that you understand where your money is going.

A pension transfer is where you move your money from your existing provider to a new one. For whatever reason you wish to do this, there are a few things you should know. You want to transfer your pension while posing no risk at all to your hard earned money.

There are a number of reasons why you may be considering a pension transfer. Whether it be that you are working for a new company or whether it be if you are just not satisfied with the rules and charges of your current provider. If you have been a resident of the UK for some time and have to move or have already been living abroad while holding a UK based pension fund then you automatically qualify for the QROPS pension transfer.

A QROPS pension scheme is an approved scheme under the HMRC and means the transfer of pension which is UK based in to Qualifying Recognised Overseas Pension Scheme. Under this, the pension transfer occurs usually to other stable offshore jurisdictions that have similar financial laws as the one that prevails within UK thus making it easier for the transfer and the plan to continue from thereon.

But there are certain terms for you to qualify for this. You need to have been a resident of UK for at least five years under the non taxable bracket. The pension transfer can take effect up to a year before you move.

The following are some of the benefits of choosing a QROPS plan for your pensions especially when it comes to the time of pension transfers:

• You can avoid IHT on pension fund.
• You can nominate a beneficiary and leave 100% of funds to them.
• There may not be a need to purchase an annuity.
• Offers complete protection against the creditors.
• There would be improved flexibility on investment.
• You can get 25% of the funds as a tax free lump sum.
• You can choose your currency.
• You can get income that is more tax efficient from your pension funds.

If you're looking to transfer your pension and need some help and advice, contact the experts at Joslin Rhodes.