PENSION TRANSFERS FOR EXPATS
Thinking of transferring your UK pension?
The FCA (Financial Conduct Authority) requires firms advising on pension transfers to have specific permission for advising on pension transfers and opt-outs.
If you are an expat based in Dubai or the UAE and you are considering transferring out of your defined contribution or your final salary scheme, you should take regulated advice.
If the value of your pension assets is in a defined benefit scheme (final salary) is valued at more than £30,000, the Government rules require your pension provider to ensure that you have taken regulated financial advice before allowing the transfer to proceed. This regulated advice must come from a pension transfer specialist, who has the requisite permissions to be able to give advice in this complex area.
A pension transfer specialist must follow the FCA’s training and competence rules, have the appropriate pension transfer specialist qualification and, with that, the permission to perform the function.
There are over 4,000 financial advisers in the UAE and only a very small proportion have the right qualifications to give advice in this area – so it is imperative to check.
Your suitability to transfer your pension will be based on your own set of personal circumstances and your financial objectives for retirement.
IS TRANSFERRING YOUR PENSION SUITABLE FOR YOU?
There are situations where it does make financial sense to transfer your pension to a new or different scheme – here are a few possible examples:
Your existing company scheme is being wound up
You feel that flexibly accessing benefits would be more beneficial to you than a guaranteed income for life.
You are worried your scheme will fall into the PPF and you are at risk of receiving a lower annual income in retirement
You have a personal pension that has high fees
You are at risk of exceeding the lifetime allowance
You have been offered an enhanced transfer value
If considering transfefreing away from a final salary scheme you are confident your income needs can be met via other sources
Leaving residual funds to your spouse or chosen beneficary is important to you.
You are a deferred memeber of a final salary scheme and reductions are being made to future benenfits or an increase in your normal retirment date
You have a number of small pensions, perhaps from a variety of employers, periods of self employment and/or various Additional Voluntary Contributions plans and you would like to amalgamate them all – perhaps in a SIPP (Self Invested Personal Pension)
You would like to add your existing personal pension to an occupational pension scheme to benefit from lower fees/employer contributions.
FREQUENTLY ASKED QUESTIONS
How do I transfer my pension?
How much does it cost to transfer my pension?
The fees for financial advice relating to pension transfers will vary. Often it will depend on the complexity of the case, and whether it is a final salary or defined contribution scheme, and whether there is more than one scheme. Advice relating to final salary schemes is complex and will usuallly involve an upfront fee for the advice.
What the fees and charges are – broken down for each aspect. Ask for complete transparency
When will you be expected to pay?
Will this be an upfront fee or an on-going fee? Or will you be charged after the transfer has taken place?
If there’s a fee for an initial consultation –
Can I consolidate more than 1 pension?
Yes there are no limits on the number of pensions you can transfer into a SIPP or QROPS as long as the ceding scheme you are transferring from permits transfers out.
At what age can I access my SIPP or QROP's?
Currently legislation dictates that the earliest you can access your SIPP or QROPS is from the age of 55, unless you are in ill health
How long does it take to transfer a pension?
Do I need to take financial advice if I want to transfer my pension?
Can I transfer a pension that is already in drawdown?
When would a pension transfer be a good option to consider?
Your current provider doesn’t offer the type of pension you want. For example flexibility may be more important to you than a guaranteed income from within a final salary scheme
You have a number of different pensions and wish to consolidate them into one pot
You are seeking more control over your pension and what it is invested in
Your Defined benefit scheme may be in deficit
You reside overseas and wish to move your pension outside of the UK
Potential tax advantages and the use of Double tax treaties
You are due a large pension from your DB scheme and the benefits payable by the PPF (in the event it enters the PPF) would be less
The options in relation to succession planning may be greater following a pension transferIt may be advisable to transfer if you are going to be affected by the lifetime allowance
How do I find a lost pension?
What is the lifetime allowance?
The lifetime allowance is a limit on the value of payouts from your pension schemes – whether lump sums or retirement income – that can be made without triggering an extra tax charge.
What is an Enhanced lifetime allowance?
How much of a pension do I need?
How much is the UK State Pension?
you have over a certain amount of Additional State Pension
you defer (delay) taking your State Pension
What is the benefit of cashflow planning for pensions?
Can I protect myself against a lifetime allowance tax charge?
Transitional protection will be available for those who think they are likely to be caught by the life time allownace and might otherwise be liable to a tax charge.
What is s pension commencment lump sum?
When you can start drawing benefits from your pension scheme, you may be able to take part or all of your pension benefits as a tax-free cash lump sum (called the pension commencement lump sum (PCLS)). If you’re a member of a defined benefit pension scheme, the scheme’s rules will determine how much you can receive as a PCLS. If you’re a member of a defined contribution (DC) pension scheme, you will normally have the option to take up to 25% of the value of your pension pot as a PCLS.