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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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Benefits of transferring your defined benefit pension

Suppose you are in a private-sector defined benefit pension plan or a funded public sector plan. In that case, you can transfer a defined contribution pension until you have already received your retirement. A fixed contribution pension is readily available at age 55, so this seems like an attractive option.

But if you transfer from a DB pension plan, you are offering valuable benefits and maybe worse than you, even if your employer gives you no incentive to switch. It is a good idea to consult a regulatory financial advisor who specializes in defined benefit pension advice before you make a decision.

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What is a Defined Benefit Pension Plan? 

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

 For example, it 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. 

 UK DB Schemes are different from the Defined Contribution plans, see: 

https://www.cjfinance.co.uk/services/uk-pension-transfers/defined-contribution-pension-transfer/

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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/

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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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Is your Cash Equivalent Transfer Value (CETV) a good deal or a bad deal? 

Learn everything you need to know before transferring your UK Final Salary Pension. 

 A CETV is required if you wish to switch from a final salary scheme (Defined Benefit / DB Scheme) into a defined contribution scheme (SIPP, International SIPP or QROPS). 

 Learn from a professional with UK 10-years pension transfer experience, what you should know about your Cash Equivalent Transfer Value (CETV), and signs if it is a good or bad deal.

https://www.cjfinance.co.uk/

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What is an Existing Expat Policy?

If you have been living abroad for some time, an Independent Financial Adviser (IFA) has likely approached you already. You may have taken out a savings plan or investment plan with them. It is also possible that you are no longer in contact with the Adviser. Old financial policies usually are located in jurisdictions such as the Isle of Man, Guernsey, Jersey, Malta or Gibraltar. If any of these locations sound familiar, then you have an existing expat policy.

Read more here about Offshore Investment.

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What is a QROPS transfer?

You can achieve this by requesting, completing and submitting a ‘transfer-out pack’ to your existing pension provider. QROPS are highly regulated, so your current pension provider will require several additional forms to satisfy their compliance processes. Completing a QROPS pension transfer is rather simple from the client’s side. The following article from the Financial Times (2019) outlines some of the background we look after and complete for our clients.