Cameron James

UK Expats - Financial and Investment Advice

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What Should You Know Before Transferring a Final Salary Pension?

A Final Salary pension scheme is an occupational pension that offers clients particular guaranteed and safeguarded benefits linked to an accrual rate. People also commonly refer to it as a Defined Benefit pension scheme or DB pension scheme. 

For example, a Final Salary pension may be 'index-linked, meaning your pension benefits are guaranteed to grow to keep pace with rising prices. People usually refer to Defined Benefit schemes as being 'gold-plated' because they are a valuable asset. They are different from Defined Contribution schemes.

More than 100,000 people cashed in their final salary schemes in the 2017/18 tax year, taking on average £200,000 at a time.

The number of transfers has increased sharply.

Transferring might not be in your best interests. Learn the possible Advantages and Disadvantages before you make any decisions. Your UK Defined Benefit scheme (DB) is a valuable asset with safeguarded benefits. 

The FCA ensures you consult a Pension Transfer Specialist before taking your Cash Equivalent Transfer Value (CETV). 

A Final Salary pension scheme is an occupational pension scheme that provides clients particular guaranteed and safeguarded benefits linked to an accrual rate. Often commonly spoken as a UK Defined Benefit pension scheme or a DB program.

For example, it should be 'index-linked,' meaning your pension benefits are bound to grow to stay at pace with inflation. As such, people usually consult with Defined Benefit schemes as being 'gold-plated' because they're a valuable asset.

It would be best if you considered all the pros and cons.

Why your Scheme may be a Valuable Asset:

Safe and 'Secure'

Index Linking (RPI/CPI)

Guaranteed Income forever (Annuity)

Possible Disadvantages of Holding a Final Salary Pension:

Limited Control, Cannot Withdraw/Access at Age 55, Risk profile 

constraints,

Currency Risk folks citizen receiving UK pension

Spouse only Receives 50% of Annual Pension

What Happens to the Principal of an Annuity once you Die?

View also: https://youtu.be/72jeaVw56sU

Benefits of Transferring an outlined Benefit Plan:

 Select your Beneficiaries who Receive 100% of your UK Pension

 Opportunity to continue Growing your UK pension during a Tax-Efficient Way

 Invest in line together with your Risk Profile and Attitude to Risk

Why you wish FCA-regulated Advice:

 For UK CETVs with Guaranteed Safeguarded Benefits over £30,000

 to make sure that a Pension Transfer is in your Best Interest

Top Reasons Why a DB Pension Transfer won't Be Suitable:

Only Retirement Asset

Limited Capital

Not landholder

Top Reason Why a DB Pension Transfer can be Advisable:

Significant Assets beyond DB Pension

don't Need Guaranteed Income always (Annuity)

Background to FCA Regulation:

 samples of Previous Bad Advice or scams within the Onshore (UK)

 Offshore Markets (non-UK residents) which has resulted in FCA Complaints

Dominic Sir James Augustus Murray, CEO and leading Pension Transfer Specialist. Cameron James, helping expats in 23 countries (including the USA and non-UK residents):

Don't forget to visit for more information about expat financial planning and pension advice!

[cjfinancial]

How the retirement benefits are paid from a Defined benefit scheme?

The employee who holds the policy has the benefit of choosing the method of payment in most of the defined benefit plans. Some of the payment options offered by this plan are as follows,

A Single life annuity

A Lump sum payment

A qualified survivor and joint annuity

A single-life annuity:

This option helps the employee to get a benefit of a fixed amount for every month until the employee lives. After the death of the employee, there are no benefits of payments to the spouse or any dependents.

A Lump sum payment:

This type of payment helps the employee to get his/her entire amount of the plan in the form of a lump sum. There are no further payments for the employee or for his dependents when the policyholder dies.

A qualified survivor and joint annuity:

The employee gets a benefit of fixed income for every month until the employee dies and thereafter it allows the surviving spouse to continue receiving the benefits for every month until he/she lives. The pension or retirement benefit to the spouse is at least 50% of the pay-out of benefits of the employee.

It is important to choose the correct payment option as it may influence the amount of benefit that the employee ultimately gets. It is recommended to go through all the options carefully and should compare every option regarding the amount of benefit offered by every option.

Read More: https://finalsalarypensionuk.medium.com/a-comprehensive-guide-to-your-defined-benefit-pension-plans-729889622f1a

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How to invest a Lump Sum for Income?

A key question we ask clients is whether they are investing their lump sum for income or capital growth. A high proportion of high clients in retirement are investing their lump sum for income. You can achieve this by using assets which have a track record of providing income, typically through dividends or bond repayments. These clients are looking to provide additional income during their retirement.

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When should I start Inheritance Tax Planning?

The earlier you focus on estate planning, the longer you have to organise your affairs in a tax-efficient way. For example, any gifts that are given IHT planning within the seven years before your death can be subject to Inheritance Tax non uk citizens. As such, you would ideally have made your IHT plans long before this period. Estate planning is not a high priority if your total estate is worth less than £325,000 (or £650,000 as a married couple) and you do not see your estate increase in value. If your estate is approaching or already over £325,000, then you need to make time to consider your options.

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How do I transfer my pensions to an International SIPP?

During your consultation, our Adviser will complete a Letter of Authority with you. This document gives us the ability to email your pension providers(pension transfers uk) to request all the relevant information (Transfer value, costs, charges, et al.). It is important to note; this does not give us the right to alter or transfer your pension. 

We then analyse this information and include the findings in your advice report for you to make a more informed decision about your pensions. If you wish to transfer, you sign the advice letter. We then do everything from there, pre-completing all admin and paperwork on your behalf for you to check and approve.

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Can I save money with an International SIPP?

We are encouraged to swap utility or broadband providers for the best deal every time we watch the TV. However, few people realise you can do the same with your pensions. Many old UK pensions have high charges and hidden costs. Did you read p.27 of your pension contract from HR when you started each of your new jobs?

It is unlikely you reviewed all the paperwork. You are not an IFA and were likely ready to celebrate your new employment.

Many older UK pensions have a bid-offer spread of between 2-5%. 

Bid-offer spread sounds like jargon. But, in simple terms, a bid-offer spread means that every time your UK pension rebalancing your portfolio by buying or selling the underlying holdings, you will incur a fee.

For example, if a UK pension reallocates £10,000 of your retirement, you will be charged between £200-£500. However, they do not need to inform you of this charge as you have signed the T&Cs of the pension plan, even if this was 20 years ago.

At Cameron James, there is a 0% bid-offer spread on all UK SIPP for US Citizen(international sips) solutions we provide. Throughout 10-years, such charges can have a significant impact on your eventual fund values. Being proactive and transferring away from outdated pension arrangements is an easy way to save yourself money.

Get More Briefing About Please Visit: https://www.cjfinance.co.uk/services/uk-pension-transfers/sipp-personal-pension/

[cjfinancial]

How do I obtain my Final Salary pension transfer value?

A Letter of Authority (LOA) is a one-page document that allows us to contact your Final salary pension transfer specialist and request all relevant information about your policy. An LOA does not allow anyone to transfer, change or alter your pension in any way, shape or form.

Completing this document does not commit you to do anything with your pension. However, it easily allows our team to gather all the required information for a detailed analysis. Final Salary schemes usually receive many valuation requests and their turnaround times are frequently longer than other UK pensions.

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What is a Digital Nomad Salary Online in UK ?

This statistic undermines the romantic idea of entrepreneurs packing their suncream and Mac and making it as a Digital Nomad uk tax. The above study also revealed the majority of remote workers (35%) are employed by a company with a fixed salary, as opposed to being a freelancer (28%) or owning their own business (18%).

These employers may well go on to become freelancers or business owners. However, this vital statistic evidences our point that the majority of successful DN’s create their nomadic lifestyle through their home employer. That is also logical as many employers may have already been working from home in Europe or the US. Therefore, the conversation of asking to work and travel remotely was not a big step for them with their current employer.

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A Comprehensive guide for your defined benefit pension plans

A defined benefit (DB) pension scheme is one where the amount you're paid is based on how many years you've worked for your employer and the salary you've earned. Defined benefit plans are appropriate for employer-sponsored retirement plans. Like other eligible schemes, they offer tax incentives to employers and partner employees.

According to the Pension Act 2014, your employer may generally contribute to the scheme. And you don't usually tax those contributions (typically during retirement) until you start receiving distributions from the plan. However, all eligible projects, including prescribed benefit schemes, must comply with a complex set of rules under the Pension Act.

Read more here: A Comprehensive guide for your defined benefit pension plans

[cjfinancial]

What is a Defined Contribution Pension Scheme?

The value of your DC pension at retirement is straightforward. It is a combination of how much you or your employer contributed and how well the underlying investments have performed. There are no other factors to consider which makes them more straightforward. This is unlike Final Salary Pension Schemes which have guaranteed and safeguarded benefits

[cjfinancial]

What is a Final Salary Pension?

A Final Salary pension uk scheme is an occupational pension that offers clients with particular guaranteed and safeguarded benefits linked to an accrual rate. People also commonly refer to it as a Defined Benefit pension scheme or DB pension scheme. For example, a Final Salary pension may be ‘index-linked’ meaning your pension benefits are guaranteed to grow to keep pace with rising prices. As such, people usually refer to Defined Benefit schemes as being ‘gold-plated’ because they are a valuable asset. They are different from Defined Contribution schemes.

[cjfinancial]

Can I Transfer my UK Pension? Learn Why Pension Transfers Are Increasing I Cameron James  

If you are coming up to retirement and your current pension scheme doesn't offer the retirement income choice that you want, then transferring all your pension pots and consolidating it into one scheme that has the flexibility you need could be a good idea. 

 However, there are several factors that might be considered when transferring pensions such as charges, funds, or any potential loss of safeguarded benefit of the previous pension scheme. It is also important to understand which pension scheme that you want to transfer, whether a defined benefit pension or a defined contribution pension scheme. 

 In this video, you will learn about factors that may influence whether you can transfer your UK Pension or not, types of private pension that you may choose and best practices on how to do due diligence before you choose a pension transfer specialist.

Click the link below to learn about SIPP: https://www.cjfinance.co.uk/services/uk-pension-transfers/sipp-personal-pension/

[cjfinancial]

What is an International SIPP I Cameron James

SIPP? Seems confusing? What it is and how it'll help me? To know answer of all the queries, you can contact Cameron James by visiting his site. A SIPP is a tax-free wrapper for consolidating all of your UK pensions together in one place. SIPPs provide investors with greater flexibility and control than a standard UK company pension. 

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Worried about  pension ? Talked to our Defined Benefit Pension Transfer Specialists

Most expatriates convert their Defined Contribution pension to an International SIPP (£50-700k pensions) or QROP (£700k pension or higher for EEA citizens). These transfers provide them more control over their DC pensions because they can manage them all in one spot. Transferring a DC pension is an important part of financial planning. The costs of a DC pension transfer are lower than a transfer from a Defined Benefit pension.

In 2015, the UK government confirmed that DC pensions would be accessible from age 55 instead of age 60 or 65. This change in legislation is referred to as UK Pension Freedom Rules. As such, if you are 56 you are free to withdraw all your DC pension retirement income. Unless you explicitly need this retirement income we would advise against such withdrawals. You will be better off gradually drawing down your pension income on a regular basis to minimize your tax.

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How to calculate retirement benefits?

The Retirement Plan for Expats is calculated as per a specific formula. This formula can provide for a certain percentage of earnings or a set amount for each year the employee works for an employer is calculated using this formula.

The retirement benefits are calculated for pension schemes by averaging the earnings of the employee by taking the average of a specific percentage and multiplying it with the number of years worked by an employee to get the result.

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How to transfer UK pension abroad?

Here are some of the ways of how to transfer your UK pension funds and you can avoid losing up most of your retirement savings. There are options for UK pension transfer abroad to another pension scheme. If you are working overseas and having one or more UK pension schemes and you want to transfer these to a pension scheme that could be based abroad and it includes the scheme of the current employer. UK pension benefits can be transferred to an overseas pension scheme only when it is recognized and approved as a Qualifying Recognized Overseas Pension Scheme (QROPS) by HM Revenue and Customs. 

The scheme must be regulated as a pension scheme in the country where it is established and recognized for tax purposes are recognized as a QROPS. The benefits that are made from this scheme paid to you are subject to taxation. It is important to choose a qualifying scheme for the expats to transfer their pension abroad. It is important to consult with the financial advisor for expats to transfer their pension scheme abroad.

If the employee wants to transfer the pension plan to the US then your UK pension scheme may not top the priorities list. You should consider managing the SIPP US in a way that meets pension and tax requirements for both UK and the US. 

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What to decide between a QROPS and a SIPP

In recent months, the differences between SIPP and QROPS are not as significant as they were. If you are a non-resident in the UK, then you will have to consider a QROPS at some stage. This is because QROPS is perfectly understandable. The quality of advice that you get mainly matters and helps you in making a decision. It is essential to remember that not all the financial advisers are qualified or will recommend a Best International SIPP.

When you get advice from a financial advisor, make sure you get a complete picture of which is best for you and consider your circumstances. Take the right decision and understand more about the pension schemes to choose the best for you.