Every country has a pension system, and the UK has one that is well-established. Nowadays, it’s commonplace to have ex-pats living and working anywhere in the world. If you’re employed as an ex-pat in the UK, pension benefits are one you need to consider. You need to know how your overseas assignment will affect your entitlement, and what options are available to maximise the returns.
Expats working in the UK qualify to receive a pension if they reach the qualifying age and number of contributions. In addition to this, you can also apply for a private pension or one provided by your employer.
What about pension for UK citizens working abroad?
When it comes to UK citizens working abroad, they can transfer their UK pension to a QROPS or Qualified Overseas Pension Scheme. What the scheme does is allow the pensioner to consolidate multiple pensions into a single plan. This option will help in managing the funds by the time the person retires. This scheme works well for individuals who are planning to retire overseas and have no plans of returning to the UK.
Although there are many advantages to QROPS, remember that this scheme isn’t for everyone. If you want to make sure that you’ll benefit from it, you can get QROPS advice from a qualified fund manager. As an extra precaution, look for an expert from a reliable firm.
What are the implications of retiring outside the UK?
If you retire outside the UK, there are many restrictions that apply. For example, tax obligations depend on the treaties and agreements between the UK and your new country of residence. If this is a cause for concern, you have two options:
- You can combine all your pensions and leave the funds in the UK. Once you retire abroad, you can withdraw the money using a foreign bank. However, there could be additional fees and charges that apply to foreign transfers.
- The second option is to transfer your entire pension funds abroad. Once again, you need to be aware of the tax implications. If you’re thinking about transferring your entire UK pension, talk to a finance expert first so that you know what to expect.
You may also want to look into the pension agreement the UK has with other countries. For example, the UK has an agreement with countries where an ex-pat qualifies for a state pension. If your residence country is included, make sure that you take advantage of this benefit.
Ex-pat retirement can be a complicated matter when it comes to managing finances. Since your pension is one of the primary sources of funds when you retire, you need to go over all the details to ensure you get the most out of it. Living abroad is indeed more affordable for some people, but make sure that you know and take advantage of the best method to access your pension pot. A financial advisor can provide you with the assistance and information you need, especially since guidelines and restrictions can change at any time.