Coronavirus Impact – Viewpoints of Investment Manager

You are not alone. Coronavirus is causing many investors extreme worry and uncertainty. The best thing to do is to seek expat financial advice in the UK regarding your pension and investments, so you can determine the best course of action. It also pays to know the viewpoints of investment managers particularly on longer-term investments like pension funds:

• Many are concerned that the Coronavirus may negatively impact the global economy, as they observe the significant decline of stock markets around the world. However, the falls should not affect the value of investments or pensions that are not heavily linked to those markets.
  
  
• Keeping your investments properly diversified around the world may offer protection against severe market crashes in a particular region. Investors may be affected by restrictions on travel and the supply chain due to the resulting falling prices, but that should not necessarily result in a long-term or medium-term slowdown. The Coronavirus may negatively affect demand for months, too, but the demand should return when the outbreak can be controlled.

• Having a good mix of assets across different geographies and sectors should prevent market volatility from harming your whole portfolio.

• The Bank of England is offering an emergency package of measures to counter the problems associated with cash flow in many households and businesses in the UK, while supporting the demand in our economy.

• A moderate pro-risk investment strategy may offer some comfort as favourable valuations for risky classes of assets, but it is still advisable to build resilience in your portfolio to protect against downward scenarios.

• You are likely to hear expat financial advice in the UK telling you to buy while other investors are panicking.

• It is risky to make long-term decisions based on short-term volatility. You may be tempted to withdraw your earnings, but this could put you at risk of missing out on the chance to earn more when the value increases again, and this could result in long-term losses.

Things You Need to Know About Defined Benefit Pension Transfer

When they retire as an employee, some individuals are members of a Defined Benefit (DB) pension scheme. Also known as a ‘final salary pension scheme’, it promises income payout based on your earnings when you retire. DB pensions are different from Defined Contribution (DC) pensions, as the amount you will receive at retirement is already guaranteed and paid directly to you.

You may want to consider a DB pension transfer if want to give up the benefits of the scheme in exchange for cash value, which you can invest in another type of pension scheme. Here’s what you need to know about transferring out of your DB pension scheme:

• What you cannot and can transfer: You will not be able to transfer your pension if you are in an unfunded public sector pension scheme. A DB pension transfer is possible if you are in a funded public sector pension scheme or a private sector DB scheme.
• How it works: If you decide that a DB pension transfer is best for you, the trustees running it will convert the benefits into a cash sum. Known as the ‘transfer value’, this can be invested in a pension scheme with a new employer, a stakeholder or personal pension, or an SIPP (Self-Invested Personal Pension). Keep in mind that not all personal pensions, SIPPs, and employer pension schemes will accept transfers, so check with them first.
• Beware of scams: Beware of claims telling you that you can transfer your pension for cash before age 55 and statements claiming that you can get more returns in a new pension scheme than your current one. In most cases, these are risky moves and are likely a scam. Keep in mind that you can transfer your DB pension to a new a scheme and receive cash out of the action if you are at least 55 years old or older.

The best way to go about a DB pension transfer is with the guidance of a regulated financial adviser. That way, you can understand the process of transferring your defined benefit pension, avoid the guesswork, and make an informed decision. Make sure that the financial adviser is credible and experienced, and that their practice is based on the Pension Transfer Gold Standard, so you can trust their ability to give suitable guidance according to your best interests.

How Advisory Firms Can Help With Expat Pension Transfer?

You have many things to worry about when moving abroad, but your pension should not be one of them. Working with an expat pension transfer specialist will make the process simpler and less stressful. Get in touch with a financial and pension advisory firm that has many years of extensive experience in helping their clients such as yourself make informed decisions on the best course of action to take. They can make a formal recommendation, whether you have an occupational or personal pension, a final salary or benefit, a SSAS or SIPP, or an unfunded scheme, and whether it comes with a guaranteed annuity rate, safeguarded rights, or enhancement.

The expat pension transfer expert will look into all sides of your financial situation and determine if the transfer is best for you. Their service usually starts with a complimentary initial investigation, so you do not have to worry about paying them anything until you agree to hire them to help you with your pension transfer. If you do decide to work with them, you can have access to a decisive and clear solution on what you should do with your pension. They will help build your confidence in their skills and ability to make the transfer successful and stress-free, with their impartial advice that is backed by nationwide compliance and technical support. This way, you can focus on other important aspects of your move, while leaving the guesswork to specialists.

An expat pension transfer ensures a seamless and simpler process, as the specialists can serve as your one-stop source for experts who can also enact the advice on your part. They will do their research on your pension schemes while considering your unique circumstances and objectives for retirement. A comprehensive report on the situation of your pension will be delivered to you, and it will cover analysis, the review of your schemes, recommendations, and reasoning behind their advice.

Everything You Need to Know About Transferring UK Pension to Canada

UK pension transfers for UK expats planning to live in Canada used to go through what is known as QROPS or Qualifying Recognised Overseas Pension Scheme (which later on became Canadian ROPS or Recognised Overseas Pension Scheme) or through another scheme set up in a different QROPS jurisdiction like Malta. Early in 2017, however, all Canadian QROPS were taken out of the ROPS list from HMRC, making UK pension transfer to Canada a lot trickier than it used to be.  It is no longer possible to transfer UK pension to a domiciled scheme in Canada, pension transfers have to go through a different path these days, that is the SIPP or International Self Invested Personal Pension, which is a lot similar in structure to a QROPS, where pension is established under a trust, except that it remains a UK scheme, which means your funds are not subject to the 25% overseas transfer charge as QROPS funds are.

If you are contemplating a UK pension transfer to Canada, it pays knowing what your options are so you can choose the best approach that can help you make the most out of your hard-earned retirement fund. An in International SIPP allows you to enjoy all the benefits of a Self-Invested Personal Pension without having to physically move your funds to your destination country. International SIPPs can provide very similar benefits as Recognised Overseas Pension Schemes, but with greater flexibility in many aspects such as in terms of how it can be invested.

When you choose to make a UK pension transfer to Canada through an international SIPP, you afford great advantages like the option to hold pension investments in dollars if you wish to do so. An SIPP also provides the flexibility in terms of lump sum and pension income withdrawals as well as the freedom from annuity or scheme pension from your existing UK scheme once transferred..

UK Pension for Expats: Why is it Needed?

Retiring abroad? It is possible to transfer UK pension for expats and move your pension pot to where you want to spend the rest of your retirement age. UK retirees with defined contribution pension can either move their pension abroad or leave it in the UK and take their money from abroad. Some choose to mix these options together, leaving one of their multiple pensions in the UK and then moving another abroad.

Pension providers in the UK do not typically pay money from a pensioner’s pot straight into an overseas account. If they do, charges may apply, depending on the provider. An alternative to this is asking your pension provider to deposit the pension into a bank account in the UK so you can withdraw the money using your debit card from elsewhere in the world or transfer the money into an account abroad. These, however, might still be subject to exchange rates and bank charges, so always check rates with banks and providers.

Moving UK pension for expats is also possible if you don’t want the trouble of multiple money transfers. To do this, however, you need to transfer your pension into a qualified pension scheme that meet the UK standards. Just the same, transferring your pension pot abroad will likely change the about that you will get upon retiring. Be sure to consult with your provider about these details whenever moving UK pension for expats.

Depending on your country of residence, you may have to pay tax (UK tax and tax in your country of residence) on your pension, unless the country you are living in has double taxation agreement, which will shield you from being taxed twice. Transferring your UK pension abroad can be a complex task to tackle on your own, which is why it pays seeking the aid of financial experts to help you smoothen out the process.

Blog Source URL: https://www.prismxpat.co.uk/blog/uk-pension-for-expats-why-is-it-needed/

QROPS UK Pension Transfers: Important Things You Should Know

QROPS, or the Qualifying Recognised Overseas Pension Scheme is one of the options available for expatriates, who are looking for their UK pension to be transferred overseas. A transfer to a QROPS can provide more flexibility and efficiency in tax planning as well as benefits related to currency hedging.

QROPS pension schemes which are recognized by the HMRC accept transfers of UK registered pension funds. This scheme allows those expats who have pension funds within the UK to transfer these across the borders, usually without any tax liability. A main condition to avoid excess taxation is that the QROPS is located within the European Union/ EEA for EU/EEA residents.

Once a transfer to a QROPS is undertaken, the transfer of the funds is measured against the Benefit Crystallisation Event 8 (BCE 8) for pension Lifetime Allowance (‘LTA’) purposes. The LTA from 6 April 2019 is £1.055m, increasing with inflation on an annual UK tax year basis thereafter. From the point that the transfer has completed, the QROPS funds are outside the UK’s LTA.  These funds, once invested post transfer, can hence grow according to your investment risk profile, without the risk of 25% - 55% taxes being levied otherwise through exceeding the UK pension LTA over time.

There are several other advantages of the QROPS scheme, such as flexible access to the funds, investment opportunities and many more. Contact an experienced investment specialist before planning your transfer of pension funds across the borders.

Blog Source URL: https://www.prismxpat.co.uk/blog/qrops-uk-pension-transfers-important-things-you-should-know/