Pensions

You need your own pension to fund your lifestyle after you stop working.

As an expat, you cannot rely on the state to provide for you in retirement.  Even if you lived in the UK and had made full National Insurance contributions all your working life, the state pension today is just under £6,500 a year – it’s unlikely to ever rise in real terms. 

Compare this amount to your salary now, and the income you hope to live on when you retire...does it come close? 

No! 

So, this is why you need your own pension.  And the good news is, as an expat you have a number of options to consider when it comes to saving for retirement.

In the UK, a personal pension policy is an HMRC approved contract set up to save specifically for retirement.  

It may attract tax benefits, depending on your residency and earnings status, and cannot usually be accessed before the age of 55 because pension solutions are designed to provide an income, and potentially a lump sum, in retirement.

Employers sometimes provide pension savings schemes for employees.  In the UK workplace pensions are now mandatory for example.

However, even if your employer does provide a workplace pension scheme, you may need to make additional savings to ensure you can enjoy the lifestyle you require in retirement.

Yes, it may be possible, depending on the type of pension scheme you have.

However, there are lots of things to consider, mainly the benefits your current scheme offers versus the potential advantages of transferring.  

This can be a complex decision to make, and one you must take advice on.  The advice you take must be from an individual who is a qualified pension transfer specialist, and in turn, they must work for an organisation that’s regulated to offer pension transfer advice.

The advantages of a pension transfer are often heavily over-sold by unqualified advisers who may stand to profit substantially from a transfer via commissions and hidden fees.

Tread with caution; the value of your pension must be preserved so your future retirement plans are not scuppered.

There are now strict limits to the maximum pension contribution you can make in the UK that can attract tax relief.

However, if you start an appropriate pensions savings scheme whilst living outside the UK as an expat, there is no limit to the contributions you can make.

You can request an illustration from us showing the effect of increasing, reducing or stopping your pension payments to see how this might affect your income in retirement.

The full value of your pension plan will normally be used to provide a cash lump sum for your dependants or beneficiaries, although it can be used to provide an income for one or more dependants or beneficiaries using an income drawdown plan.

If you are under 55, it’s unlikely that you will be able to cash in your pension pot because pensions are a specific type of savings scheme designed to provide you with an income in retirement.

Once you reach the age of retirement and want to access your pension, you have many options depending on the scheme.  You may be able to take a lump sum, you can certainly take an income. 

It’s critical you take advice about how to access your investments in retirement so that you’re tax efficient, and your entire portfolio provides you with sufficient income for the rest of your life.

Even if you’ve never spoken to a financial adviser before, when it comes to retirement income planning, you’re likely to derive great value from speaking to a chartered financial adviser.

Please talk to us to find out more about your options for accessing and utilising your pension savings.