Overseas pensions - all you need to know

Contributed by WorldFirst, 15 February, 2018

Moving abroad can be a daunting task regardless of age, travel experience or time spent working between countries. One of the most commonly queried aspects when moving abroad is 'what happens with my pension when I move abroad?', and it is this overseas pension clarification, which this post aims to help you with.

Living overseas – Can you still receive a UK State Pension?

Frequently a question expats will ask regardless of new, or intended new place of residence. To summarise this:

"It's possible to live in another country and receive a UK State pension, but you should be aware that you will only be eligible to receive pension increases each year if you live in the European Economic Area, Switzerland or a country that has an agreement with the UK. Otherwise, you won't get annual increases, unless, of course, you move back to the UK.

So far there haven't been any changes to the pension rights of UK nationals living abroad in the EU resulting from the referendum, but of course this may be subject to change as formal agreements are finalised."

Source: WorldFirst Overseas Pensions FAQs

Working overseas – Can I still ay into a UK pension scheme?

At the time of writing this, and based on referencing other online sources, if you are working overseas and still choose to pay into your UK pension scheme, you are able to pay in any amounts you wish to.

One area that you will likely want to investigate however, is any impact that your pensions contributions may have on your tax relief that you may be able to claim.

You should also pay attention to the exchange rates as this may directly impact the amount of GBP that actually enters in to your UK pension via your new country contributions.

As with all information in this article, if you have any doubt, your primary point of call should be your IFA.

What happens with my pension when I move abroad?

There is still an opportunity to receive a UK state pension when living abroad (depending on your circumstances).

At the time of writing this answer:

"... you will only be eligible to receive pension increases each year if you live in the European Economic Area, Switzerland or a country that has an agreement with the UK. Otherwise, you won't get annual increases, unless, of course, you move back to the UK."

Source: https://www.worldfirst.com/uk/blog/your-money/lifestyle/questions-answered-need-know-overseas-pensions/

Getting advice – Speaking to an Independent Financial Advisor (IFA)

Without doubt, regardless of the online research you can complete individually, it is imperative that key financial decisions should include at least a phone call or brief one to one with your preferred Independent Financial Advisor (IFA).

Whilst Internet research can be great for increasing your awareness on the topic, as well as growing your confidence to discuss the topic with a professional, you should not take on life changing decisions without at least referencing the experts.

Pensions, like most things financial are often subject to change, and what you may believe to be long-running fact, may in fact be dated knowledge and changed legislation. There are many examples of this changing pension legislation available online, including how you access your Defined contribution (DC) pension pot.

Government support – HM Revenue & Customs – Foreign pension schemes

A primary resource for UK help, support and advice on pensions is the HM Revenue & Customs – Foreign pension schemes online resource.

This resource can help people understand the impact of moving abroad as well as the main consideration areas, and associated admin to complete in advance of any change.

You can also gather further advice for free, and find out about the very latest items affecting you and your circumstances the most.

Seeking pension provider help &advice

Whilst the HM Revenue& Customs will provide you with the UK specific foreign pension scheme details, you may find that the interpretation and application of these guidelines are applied differently depending on your pension supplier.

Aegon UK for example provide their feedback on areas including the below at https://www.aegon.co.uk/support/faq/pension-technical/Overseas-transfers-in.html:

Your pension provider will be very familiar with supporting their client base with changing pension circumstances including relocation, so I would expect this to be a fairly pain free experience.

Money matters – Moving your money overseas

On top of the money matters directly tied to your pension and moving overseas, is how you move any money abroad.

Whether you are looking to buy a house, set up ongoing direct debits to pay for repeat bills, or looking to continue to pay into your pension while living abroad, there are some important factors to take note of.

From choosing the bank, broker or financial institution to move your money, right through to money  movement limits, and speed of transfers, it is important to consider the international payments options available to you.

Some of the common factors for moving money overseas include:

Conclusion

Regardless of income, country, or personal circumstances, there are a number of factors to consider when keeping, changing, cancelling, or moving your pension overseas.

Whilst there are pension provider resources, UK government advice and information areas, and other online research opportunities, the general rule of thumb from all of these areas cites seeking professional Independent Financial Advisor (IFA) help.

Good luck with your relocation and please share your personal tips here for others.

Tags: agreements | Pensions | Europe | Work | Other | Pensions | pensions | Switzerland | legislation | tax |

 

 





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